Reform of pension tax relief
This briefing outlines the current system of pension tax relief and covers the main areas of debate about future reform.
Issues frequently raised by constituents related to the 'old' State Pension for those who reached State Pension age before 6 April 2016.
The old State Pension (989 KB , PDF)
The ‘old’ State Pension refers to the contributory state retirement pension system in place for people who reached State Pension age before 6 April 2016:
The old State Pension has two tiers:
The pre-April 2016 system is ‘old’ because the ‘new’ single-tier State Pension was introduced for people reaching State Pension age from 6 April 2016 onwards.
This briefing covers issues with the old State Pension most frequently raised by constituents, including how entitlement was built up, why some people have been underpaid, and the arrangements for those who were ‘contracted-out’ of the additional State Pension.
What became the basic State Pension was introduced in 1948. It closely resembled proposals set out in the 1942 Beveridge Report for a contributory flat-rate national minimum pension, on top of which people could build through voluntary action. A range of reforms were introduced in subsequent decades:
Institute for Fiscal Studies, The history of state pensions in the UK: 1948 to 2010, 9 June 2010, section 2
Pensions Policy Institute, The Pensions Primer: a guide to the UK pensions system, 4 July 2024
Department for Work and Pensions, Single-tier pension: A simple foundation for saving, 14 January 2014, annex 1
HM Treasury, Tax benefit reference manual: 2009-2010 edition (PDF), July 2009, section 8
The old State Pension (989 KB , PDF)
This briefing outlines the current system of pension tax relief and covers the main areas of debate about future reform.
This briefing gives an overview of pensions taxation in the UK.
A look at how UK pensions compare with those in other countries. The note compares the UK state pension with similar systems in Europe and goes on to look more broadly at the structural differences in the sources of pensioner income across economically advanced countries.