Introduction

On 6 April 2016, the Government introduced the new State Pension for people reaching State Pension age from that point onwards. This replaced the previous two-part state pension arrangements: the Basic Pension and earnings related State Second Pension (S2P); and the predecessor to S2P, the State Earnings-Related Pension Scheme (SERPS).

The classic scheme was ‘contracted out’ of S2P between 6 April 1978 and 5 April 2016, and as a result, members paid lower rates of National Insurance contributions and did not build up entitlement to the S2P element of the previous two-part state pension during this time.

When your new, State Pension is calculated at retirement age, it will take into account any period you were a member of a contracted out scheme. From 6 April 2016 classic is no longer contracted out of S2P.

classic

• Is a defined benefit occupational pension scheme based on final salary. You will pay a percentage of your pensionable earnings, and your employer will also make their contribution. See the Civil Service Pensions website for current contribution rates.
• For most members has a scheme pension age of 60.  
• Lets you increase your pension by making additional payments (called added pension).
• Gives you an automatic lump sum and income that is increased in line with rises in the cost of living when you retire and benefits for your dependants in the event of your death.
• Offers you a range of flexibilities; for example, you can choose to take an additional lump sum from your pension benefits when you retire.
• Includes valuable life cover before you retire and it may provide protection if you suffer serious ill health.