The Pensions Act 2007
The Pensions Act 2007 puts into law the reforms to the state pension system set out in the White Paper, Security in retirement: towards a new pension system published in May 2006.
These reforms to the state pensions system cover the Basic State Pension and the State Second Pension and will change some of the the qualifying conditions for both.
The Act only applies to Great Britain but it is intended that Northern Ireland, which has its own pensions legislation, will make corresponding provision for its customers in due course.
Key changes are set out below:
Basic State Pension (BSP)
- from 2010 reducing the number of qualifying years needed to receive a full BSP from 39 for women and 44 for men to 30 years for both
- Linking annual cost of living increases in BSP with earnings rather than prices.(subject to affordability and the fiscal position this will start in 2012 but, in any case, by the end of the next Parliament at the latest);
- changing the contribution conditions for BSP so that it is easier for everyone to build up some entitlement;
- replacing Home Responsibilities Protection (HRP) with a new system of weekly credits for those caring for children up to the age of 12 and for those who spend at least 20 hours a week caring for severely disabled people;
State Second Pension (S2P)
- from 2010 introducing national insurance credits for those with long-term disabilities and people with caring responsibilities so that they can build up some additional pension entitlement.
State Pension Age
- Gradually increasing state pension age, between 2024 and 2046, to 68 for both men and women to reflect increasing longevity in society and make the state pension affordable in the long term.
You can also read more about the Bill's progress through parliament and download a copy of the Pensions Act 2007, the Explanatory Memorandum and the Regulatory Impact Assessment.