Old statement of graduated pensions

Lincsdebt

While going through some old paperwork, I found a small slip which is a Statement of Graduated Contributions. It's dated 1975 and has my old surname (now remarried) plus a very old address. I think it is from when I left a job with the local council, which must've been around 1975.


My question is, will this (very small) contribution have moved with me - it does have my NI number on the form - or do I need to contact someone to advise them of my present details? It's not that I'm expecting a pension from it, I think the payment would be worth about 5p a year.


Will this affect my state pension when I retire (2021)? I've no idea what happened to graduated pensions myself.


Thanks for any help that's offered.

xylophone

In April 1961 the government introduced the State Graduated Pension, also known as the Graduated Benefit or Graduated Retirement Benefit. It was a state scheme related to employee National Insurance contributions which were in turn related to earnings. The National Insurance contributions were divided into ‘units’: essentially every £7.50 that a man contributed and every £9 that a woman contributed bought one unit. These units would be given a value and used to calculate entitlement to an extra benefit on retirement.

The scheme ceased in 1975 - state pensioners under the old scheme see it on their annual statement of benefit as a separate category and it can add a small amount of money to the weekly pension.

SERPS and S2P were the successors to SGP.

You will receive your state pension under the new scheme.


Any graduated pension you may have will be used in the calculation of your starting amount.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

The figures are outdated - full NSP is £155.65.

xylophone

You can get a new state pension statement.

https://www.gov.uk/government/publications/application-for-a-state-pension-statement

molerat

A new SP statement will not give any reference to additional pension though and would need to be calculated using knowledge of how the system works. Graduated retirement Benefit stopped being shown as a separate item after 2012 and was combined with other additional pension amounts. Mine was showing as £3.25 and MrsM had the grand sum of 25p, both these amounts carried forward into the new amounts.

Lincsdebt

Thanks for your responses. They make things clearer, certainly won't get rich on what I have on the statement, but at least I know it will be included in whatever pension I get when I retire.

JezR

If this statement includes the number of units accumulated then you can get an idea of how it contributed to your starting amount. Each unit was in the end worth 13.3p pension per week (and still is this year for people receiving an old state pension).

xylophone

If this statement includes the number of units accumulated then you can get an idea of how it contributed to your starting amount. Each unit was in the end worth 13.3p pension per week (and still is this year for people receiving an old state pension).

A note compiled for the IFS advises that the maximum a "contracted in" man might have is 86 units (48 if contracted out) - for a woman it is 72 or 40.

molerat

I have just googled rates and in 2012, when they stopped publishing the separate figures on pension forecasts, a unit was worth 12.51p so that gives me 26 units and MrsM 2 units. Never too old to learn

xylophone

I have just googled rates and in 2012, when they stopped publishing the separate figures on pension forecasts, a unit was worth 12.51p so that gives me 26 units and MrsM 2 units. Never too old to learn

Each unit was in the end worth 13.3p pension per week (and still is this year for people receiving an old state pension

Those old state pensioners are coining it...:)

JezR

If valorisation hadn't been belatedly applied since 1979 each unit would have still been 2.5p. Inflation was one of the real weaknesses of the grad scheme as it never took account of it when it was operational.

xylophone

Inflation was one of the real weaknesses of the grad scheme as it never took account of it when it was operational.

http://www.ifs.org.uk/bns/bn105.pdf

The first earnings-related state pension to be implemented, in 1961, was
the graduated retirement benefit (GRB). The idea was that wage-earners
would have to make mandatory contributions up to a certain level of
earnings; these contributions would allow workers to buy ‘units of
pension’ that would be convertible into a weekly income according to the
value of these ‘graduated pension units’.

However, to reduce the cost, the government did not increase the nominal value of pension units between 1961 and 1978, despite cumulative inflation over this period of nearly 300%. Thus this social insurance scheme died almost at birth because of the government’s refusal to accept its inherent cost.