The pension which most people expect to receive is the state retirement pension for women from the age of 60 and for men from the age of 65, but women in employment after 2010 will not be so entitled until the age of 65. The state retirement pension has two parts. One is a flat rate, the full amount of which depends on the contributions to the national insurance scheme made by the pensioner while working or made on behalf of a woman by her husband. On divorce it is sensible to enquire of the Department of Social Security as to the level of additional national insurance contributions it may be necessary for a woman to make in order to maintain the maximum retirement pension.
In 1978 the government introduced the State Earnings Related Pension Scheme (SERPS) which is the second part of the state pension. This is intended to produce one-fifth of average earnings on retirement, but those working could contract out of the scheme in order to make their own arrangements by membership of a suitable pension scheme.
Many firms have occupational pension schemes which provide for the widow or widower of their members. The value of the loss of future pension benefit is one of the factors the court is obliged to take into consideration when making financial orders following divorce (Section 25 Matrimonial Causes Act 1973; see Chapter 7).
If an employee changes employment the pension rights from his or her previous earnings may remain in the former company’s fund or may be transferred to the scheme of his or her new employers. The proportion of gross earnings which can be contributed to a pension depend on age: below the age of 50, 17.5 per cent of earnings can be contributed, tax relief being given at the top rate of tax so that there is considerable tax saving for those who are