To afford the lifestyle you want when you retire, you need to do something about it today - the buts stop here. It may be tempting to say, "But retirement is a long way off", yet it's never too early to start investing in order to protect your future. To find out more, read our 'Pensions Guide' section by clicking 'Open Guide'. Once you have read that, why not view our 'What is a Pension?' video, presented by Lisa, our online guide.
Our easy overview introduces you to the basics of pensions, provides information on the products available and gives you helpful hints on things to consider.
The State Second Pension replaced the State Earnings Related Pension Scheme (SERPS) in April 2002.
At the moment, to get the State Second Pension when you retire, you usually need to be employed with an income of a set amount each year. This may change with each tax year, so you can visit the www.gov.uk website to find out the minimum level for this tax year. You also need to be paying National Insurance contributions. However, if you're a carer or long term disabled and so can't be in paid employment, you could still be entitled to the State Second Pension.
You won't have any State Second Pension entitlement for any periods during which you were contracted out of it.
From the 6th April 2012 contracting out of the State Second Pension (S2P) ceased to be an option for Defined Contribution pensions (Group Money Purchase, Personal Pensions and StakeHolder Pension plans). This means that from the tax year 2012/2013, if you were contracted out you were automatically contracted back into the State Second Pension. Your National Insurance contributions from the tax year 2012/2013 onwards will be paid into the State Second Pension. In addition the rules associated with contracted out / protected rights monies ceased to exist for these types of contract. All National Insurance contributions received will be treated the same way as the rest of your pension fund.
You'll find out what, if any, State Second Pension you're entitled to when you claim the Basic State Pension. The Pension Service will normally send you the relevant forms and ask you to make a claim about four months before you reach state pension age.
If you don't receive a letter asking you to claim your pension, you can call The Pension Service on 0845 300 1084 or visit the www.gov.uk website.
Again if your response is, "But I don't really understand how to plan my finances better", we're here to help. It's all about getting the information you need to make the right decisions. Our tools and calculators can help you get to grips with your finances and plan for the future.
See whether you're on track to fund the retirement you want.
Now you've learnt more about pensions, you can compare the features of Aviva's pension plans, or apply for your chosen option:
You can make regular or one-off payments into a Personal Pension plan and stop, restart and change your payments to suit yourself.
It's a tax-efficient way of investing for your retirement, but bear in mind that you won't have access to the money in your pension fund until you retire.