A SERPS pension is the State Earnings-Related Pension Scheme, an earnings-linked top-up paid on top of the basic State Pension. It ran from 1978 to 2002, and only employees paying full Class 1 National Insurance built it up. It is also called the Additional State Pension. It is shut to new contributions, yet it still shapes millions of weekly payments.
- SERPS ran from April 1978 to April 2002, then became the State Second Pension.
- Only Class 1 employees qualified, never the self-employed.
- The maximum Additional State Pension in 2026/27 is £230.54 a week.
- “Contracting out” swapped SERPS rights for a workplace or personal pension.
- A spouse or civil partner can inherit 50% to 100%.
What Is A SERPS Pension?
SERPS was built to lift retirement income above the flat basic State Pension. Before it, the Graduated Retirement Benefit did the same job from 1961 to 1975. Wikipedia records that SERPS began life as the State Earnings Related Pension Supplement.
Employers and employees both paid in. The rule was simple: the more you earned, the bigger the top-up you received.
Accrual stopped in April 2002. The State Second Pension took over, built to pay low earners more. It closed in April 2016, when both merged into the New State Pension.
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Who Was Eligible For SERPS?
You had to be employed, paying full Class 1 National Insurance above the Lower Earnings Limit. The self-employed were shut out, as were those unemployed or studying.
The Additional State Pension applies to men born before 6 April 1951 and women born before 6 April 1953. GOV.UK confirms that anyone born later gets the New State Pension, although they may still inherit from a partner. With the State Pension age still climbing, more people are working longer, and the rise of longer working lives in Britain is changing how households plan their retirement income.
The State Second Pension widened the net from 2002. Credits went to anyone earning at least the Lower Earnings Limit, £5,824 in 2015/16, plus carers on Carer’s Credit, foster carers, Child Benefit claimants with a child under 12, and some illness or disability claimants.
How Your SERPS Payout Was Worked Out
Each year, your “surplus earnings” were measured: pay between the lower and upper earnings limits, the upper at roughly seven times the lower. That pay was then revalued in line with national average earnings.
- Earnings from 1978 to 1988 were divided by four, giving the 25% target.
- Earnings from 1988 to 2002 were multiplied by a figure set by your state pension age year, sliding from 25% to 20%.
- The total was divided by your complete tax years.
The Social Security Act 1986 cut that target to 20%. Rights built before 6 April 1988 were protected, and the cut was phased in between 1999 and 2009.
How Much SERPS Pension Can You Get In 2026/27?
| Payment | Weekly amount 2026/27 |
|---|---|
Basic State Pension (full) | £184.90 |
Maximum Additional State Pension | £230.54 |
New State Pension (full) | £241.30 |
According to the report from Which? lists the same £230.54 ceiling, excluding any state pension top-up purchased between October 2015 and April 2017. Bear in mind that State Pension income is taxable, so it adds to your total income and can affect which UK tax brackets you fall into.
Sir Steve Webb, former Pensions Minister and consultant at LCP (Lane Clark & Peacock), said, “But you would need to have worked every year for the best part of 40 years and earned consistently £50,000 a year in today’s money while never having been contracted out to qualify for the maximum you could get.”
The full basic state pension requires 30 qualifying years, while the new state pension requires 35. Gaps in your record, especially from years spent caring for children, can leave you short, and some people have since been found owed money through State Pension underpayment errors, so it pays to check your record. Anything above the flat rate in 2016 became a “protected payment”, still paid today.
Opted Out Of SERPS? What Contracting Out Really Meant
Plenty of workers were pulled out of SERPS. The process was contracting out, and it needed an employer-run contracted-out scheme.
Final salary schemes could opt out from the start if they promised a guaranteed minimum pension. You and your employer then paid lower National Insurance. Rest Less points out that NHS, police, armed forces and council staff were especially likely to contract out.
Money purchase schemes were introduced from 1988 onwards. Instead of a guarantee, the National Insurance saving went into the pension, with a government incentive payment on top. These funds were labelled “protected rights”, scrapped as a category in 2012 when they merged into ordinary pots. Contracting out ended for these schemes in April 2012 and went completely on 6 April 2016.
Not everyone was well served. The Financial Services Authority investigated SERPS mis-selling after concerns that millions were wrongly advised into an appropriate personal pension. Findings were mixed: some lost out, others did better.
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How Do I Find My SERPS Pension?
Start with an old payslip. A National Insurance table letter of D, E, N, L or O means you are contracted out. Then try these routes:
- Request a State Pension forecast on GOV.UK to see your contracted-out deduction.
- Ring old providers and ask about “protected rights” or “contracted-out rights”.
- Ask former employers, whose records may hold scheme details.
- Use HMRC’s Pension Tracing Service if the provider has vanished.
You can also write with your National Insurance number to SARS/DPU, National Insurance Contributions & Employers Office, HM Revenue and Customs, BX9 1AN. Replies arrive within 30 days.
Can I Cash In My SERPS Pension At 55?
No. The Additional State Pension is paid for life alongside your basic State Pension, straight into your bank. No lump sum, no early access. Because the Additional State Pension is a top-up rather than a full income, it is worth checking whether you can actually afford to retire on your combined pensions.
A contracted-out pot is a different story. Cameron James explains that money diverted out of SERPS normally landed in a defined contribution scheme, which gives far more freedom. You can take it from 55, rising to 57 from April 2028, as cash, drawdown or an annuity. PensionBee accepts such transfers, but check first for older guarantees that vanish on moving.
Inheriting A SERPS Pension
A surviving spouse or civil partner may inherit part of the Additional State Pension. The State Second Pension is capped at 50%. For SERPS, the share depends on the date of death and date of birth.
| Man’s date of birth | Woman’s date of birth | Maximum inherited |
|---|---|---|
5 Oct 1937 or before | 5 Oct 1942 or before | 100% |
6 Oct 1937 – 5 Oct 1939 | 6 Oct 1942 – 5 Oct 1944 | 90% |
6 Oct 1939 – 5 Oct 1941 | 6 Oct 1944 – 5 Oct 1946 | 80% |
6 Oct 1941 – 5 Oct 1943 | 6 Oct 1946 – 5 Oct 1948 | 70% |
6 Oct 1943 – 5 Oct 1945 | 6 Oct 1948 – 5 Jul 1950 | 60% |
6 Oct 1945 and after | 6 Jul 1950 and after | 50% |
If your partner died before 6 October 2002, you can inherit up to 100%. Remarry before your state pension age, and the right is lost. On divorce, a court can order it shared, using form BR20, so preparing for divorce by gathering your full pension records early makes the process far smoother.
FAQs
Q1: Is SERPS The Same As The Additional State Pension?
Partly. SERPS ran from 1978 to 2002. The State Second Pension and the State Pension top-up make up the rest of your pension.
Q2: Can I Still Pay Into SERPS?
No. SERPS closed in 2002 and its successor in 2016. Only voluntary National Insurance lifts your state pension now.
Q3: Will I Get The Full State Pension If I Am Contracted Out?
Possibly. You need 35 qualifying years for the full New State Pension. Long spells of contracting out often leave you short.
Q4: How Do I Know If I Opted Out Of SERPS?
Check an old payslip for NI letters D, E, N, L or O. Your State Pension forecast will also confirm it.
Q5: Does Being Self-Employed Affect SERPS?
Yes. The self-employed paid Class 2 contributions, so they built up no SERPS or State Second Pension.
Q6: Where Did My Contracted-Out Money Go?
Into a workplace or personal pension picked by you or your employer. No single provider held it, so tracing is often needed.
Disclaimer: This article regarding the SERPS pension and UK state benefits is published solely for informational and educational purposes and is not intended for promotion, commercial gain, or financial solicitation. Readers should independently verify all facts, figures, and eligibility criteria, and seek professional independent financial advice before making any major retirement or pension decisions.
