Pensions in the United Kingdom

Pensions in the United Kingdom, whereby United Kingdom tax payers have some of their wages deducted to save for retirement, can be categorised into three major divisions – state, occupational and personal pensions.

The state pension is based on years worked, with a full 35-year work history yielding a pension of £203.85 per week. It is linked to the Consumer Prices Index (CPI) rate. Most employees are also enrolled by their employers in either defined contribution or defined benefit pensions which supplement this basic state-provided pension. It's also possible to have a Self-invested personal pension (SIPP).

Historically, the "Old Age Pension" was introduced in 1909 in the United Kingdom (which included all of Ireland at that time). Following the passage of the Old Age Pensions Act 1908 a pension of 5/— per week (£0.25, equivalent, using the Consumer Price Index, to £33 in 2023), or 7/6 per week (£0.38, equivalent to £49/week in 2023) for a married couple, was payable to persons with an income below £21 per annum (equivalent to £2800 in 2023); the qualifying age was 70, and the pensions were subject to a means test. The age of eligibility was moved to 65 for men and 60 for women, but, between April 2010 and November 2018, the age for women was raised to match that for men, and the retirement age for both men and women is increasing to 68, based on date of birth, and by no later than 2046.