Downgrade of S2P from 2010

David Davison

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The value of the state second pension (S2P) is to be reduced from April 2010. Individuals earning more than £31,800 per annum will see a reduction of around 5% in the benefit built up despite continuing to pay the same national insurance contributions as prior to the change. The Government have claimed that the move will be offset by their proposed re-introduction of the earnings link to state pensions.

In a separate move widows will only be able to claim half of their husbands S2P rather than the full amount, a move which will undoubtedly impact those spouses who have stayed out of the workforce to raise a family.

All looks like an effort to control the costs associated with the re-introduction of the earnings link to the basic state pensions as life expectancy continues to improve.

David Davison

Post by David Davison

Specialist consultant on pensions strategy for corporate, public sector and not for profit employers

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