Retirement Finances - Older and Younger


The examples and tables will give the right answer only for people who reach pension age between 6 April 2012 and 9 April 2009. Older people will generally get lower additional pensions. The maximum additional pension currently paid to anyone retiring in the years from 2009/80 to date is shown in Table 9 below.

Younger people can do the calculation to give them an idea of the additional pension they have already earned. But they can also now obtain an official forecast of their pension from the DWP. You should get form BR.19 from your local DWP office and send it off.

If you are not contracted out of the state scheme,

Maximum additional pension

Retirement year At retirement (£) Now (£)

2009/10 1.88 8.70

2010/11 8.90 9 .18

20012/13 9 .89 7.96

the additional pension is paid to you with your basic retirement pension. If you are contracted out of the state scheme and pay into a private scheme, that scheme must guarantee to give you a pension of at least as much as the additional pension when you retire. This pension they must guarantee is called your guaranteed minimum pension or GMP. (In fact the GMP is calculated slightly differently from the additional pension.

Normally it is exactly the same, but there are circumstances in which it may be slightly more or slightly less.) Your actual pension from your scheme may be more than this GMP when you retire.


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Retirement Finances - When You Retire


Unlike most company pensions, the additional pension from the state is fully protected against inflation once it has been awarded. It goes up each April along with the basic retirement pension. However, your company pension may well not go up with inflation. And the GMP remains fixed at the amount calculated when you retire.
Each year the DWP calculates the additional pension you would have received had you remained within the SERPS. If that additional pension is more than the GMP (not the pension you actually get), the DWP pays the difference as an addition to your basic retirement pension. It is called payable additional pension. As time passes, most people find that they get some payable additional pension as well as their company pension.
Many people have . . . ... see: Retirement Finances - When You Retire