A specified sum paid regularly to a person who has reached a certain age or retired from employment. It is normally paid from the date of reaching the specified age or the retirement date until death.
In the UK, contributory retirement pensions are usually paid by the state from the normal retirement age (currently 65 for men and 60 for women, gradually adjusting from 2010 to 65 for both) irrespective of whether or not the pensioners have retired from full-time employment. A wife or widow who was bereaved before 9 April 2001 may also receive a state pension based on her husband's contributions. See pay-as-you-go pension system.
Since 1978 state pensions have been augmented by the State Earnings-Related Pension Scheme (SERPS); this is now gradually being replaced by a non-earnings-related scheme, the State Second Pension. Employers can contract out of this additional state pension scheme provided that they replace it with an approved occupational pension scheme, personal pension scheme, or stakeholder pension scheme.
The private sector of the insurance industry also provides a wide variety of pensions, annuities, and endowment assurances. Financial analysts predict a major pensions crisis in the mid-21st century, since demographic trends will produce an ever-growing number of people beyond retirement age drawing on insufficient state and personal provision.
Subjects: Financial Institutions and Services.