Pension provision in the United Kingdom

Pensions in the United Kingdom fall into three major divisions and 7 sub-divisions, including both defined-benefit and defined-contribution:

Personal accounts, automatic enrolment and the minimum employer contribution will be new policies joining these from 2012.

The state provides basic pension provision intended to prevent poverty in old age. Until 2010 men over the age of 65 and women over the age of 60 were entitled to claim state pension; from April 2010 the age for women is gradually being harmonised to match that for men. Longer-term, the retirement age for both men and women will rise to 68 by no later than 2046 and possibly much earlier.

The basic state pension, then known as the "Old Age Pension" was introduced in the United Kingdom (which included all of Ireland at that time) in January 1909. A pension of 5 shillings per week (25p, equivalent, using the Consumer Price Index, to £24 in present-day terms), or 7s.6d per week (equivalent to £35 today) for a married couple, was payable to a person with an income below £21 per annum (equivalent to £2000 today), following the passage of the Old Age Pensions Act 1908. The qualifying age was 70, and the pensions were subject to a means test.

Until the 20th century, poverty was seen as a quasi-criminal state, and this was reflected in the Vagabonds and Beggars Act 1495 that imprisoned beggars. During Elizabethan times, English poor laws represented a shift whereby the poor were seen merely as morally degenerate, and were expected to perform forced labour in workhouses.

The beginning of the modern state pension was the Old Age Pensions Act 1908, that provided 5 shillings (£0.25) a week for those over 70 whose annual means do not exceed £31.50. It coincided with the Royal Commission on the Poor Laws and Relief of Distress 1905-09 and was the first step in the Liberal welfare reforms to the completion of a system of social security, with unemployment and health insurance through the National Insurance Act 1911.

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