The pension timeline

1908 The Old Age Pensions Act introduced a pension of between 10p and 25p per week to people aged 70 or over. This came into effect on January 1st 1909, which is known as Pensions Day. You could only receive this pension if you were deemed of "good character".

1921 The Finance Act introduced tax relief on pension contributions. This meant that the income tax that would normally be deducted was also added to the pension, boosting the overall size of the fund.

1946 Through the National Insurance Act a State Pension for everybody was implemented on a contributory basis. Taking effect from 1948, men were eligible at 65, while women could receive it from 60.

1978 The Social Security Pensions Act created the State Earnings Related Pension Scheme (SERPS). This was specifically a government pension scheme which employees and employers contributed to between 6 April 1978 and 5 April 2002. The purpose of SERPS was to provide a pension related to earnings, in addition to the basic state pension.

1980 The Social Security Act removed the link between a person's average earnings and the increases in the State Pension.

1988 The Financial Services Act of 1986 came into force and personal pension plans were launched in this year.

1995 The Pensions Act implemented regulatory and compensation schemes in response to major fraud cases as well as introducing protections that meant members benefits were protected and could not be reduced without consent.

1999 The Minimum Income Guarantee (MIG) was introduced, providing a minimum income support for those on low incomes.

MIG was replaced by Pension Credit in 2003 as the main means-tested benefit for retirees on low incomes. For the most up to date information on eligibility and how to claim Pension Credit visit Gov.uk.

2001 Stakeholder pensions, the low-cost pension scheme, were introduced. These are designed to help low and average earners, and to assist women in saving for retirement.

2002 SERPS were replaced with the State Second Pension Scheme (S2P), to help lower earners top up their State Pension. Contracting out of S2P was abolished in 2012 and S2P itself ended in 2016, having been replaced by a single State Pension.

2004 The Pensions Act introduced the Pensions Regulator, which could intervene if it thought majority shareholders, directors or employers were not sufficiently supporting the employees’ pension scheme. The Act also included the Pension Protection Fund to offer benefits for pension scheme members whose scheme had been wound-up due their employer’s insolvency.

2006 Known as A-Day, pension simplification brought in changes including the ability for people to save money into personal and company pension schemes concurrently.

A further change was announced allowing people to save up to 100% of their income (capped at £215,000) each tax year, receiving tax relief at their marginal rate. The total amount that could be saved into a pension over a lifetime was also restricted.

A-Day also removed the rule that forced people to buy an annuity by their 75th birthday, although funds that were not in an annuity would be included in inheritance tax when passed on to a beneficiary.

2010 The State Pension age started to change for women, beginning its increase from 60 to eventually be 65 in line with men.

2011 Triple lock was introduced. This means that the State Pension increases by the highest of inflation, average earnings or 2.5%. In 2018, the government confirmed that the triple lock will remain in place “for the rest of this parliament”.

2012 Auto-enrolment, probably the biggest initiative in UK pensions, began to roll out. Every employer in the UK must put their qualifying employees into a pension scheme and, where appropriate, pay contributions.

As a result, millions of people now have access to a company pension scheme, many for the first time. To qualify you must be between 22 and State Pension age, earn more than £10,000 a year and usually work in the UK. Employees can opt-out but it’s not advisable.

2014 Massive pension reforms were announced in the April budget, increasing the options as to how retirement income is taken. These are known as the pension freedoms. Everyone who can take advantage of the reforms is offered free and impartial guidance.

It was also announced that the age at which a private pension can be accessed will increase from 55 to 57 from 2028 and will then stay 10 years below the State Pension age.

2015 April 2015 saw the start of the pension freedoms which meant that:

- All withdrawals from a defined contribution pension after the age of 55 will be treated as income; the amount of tax you pay will depend on the amount of other income you have in that year.

- Subject to your pension scheme rules, up to 25% of your pension pot can be accessed completely tax-free. And an entire defined contribution pension fund can be withdrawn in one lump sum, subject to marginal rates of tax.

- No death tax will be applied to pensions of people who die before the age of 75. Only the recipient's marginal tax rate is applied to withdrawals if the holder died after 75. Savings can be passed down the generations.

2016 The new flat rate, single tier State Pension was launched. To qualify you need to have at least 10 years of National Insurance contributions. To qualify for the full new State Pension, you need to have 35 qualifying years. The full new State Pension is £185.15 per week (April 2022).

2018 In December 2018, the State Pension age for women increased to 65, phased in from April 2010.

2019 In April 2019, auto-enrolment contributions increased to 8%. 5% is taken directly from your salary, this includes tax relief, and your employer contributes 3%.

2020 In October 2020, the State Pension age increased for both men and women to 66.

2020 In October 2020, the Financial Conduct Authority banned contingent charging. Contingent charging was a controversial pension advice model where financial advisers only got paid following the transfer of a client’s defined benefit pension. These pensions hold a lot of value so it can be argued that contingent charging creates a conflict of interest.

2021 In 2021, the government suspended the triple lock system.

The triple lock system was introduced in 2010 to ensure the State Pension keeps up with inflation. It meant that the State Pension amount would increase depending on which of the following was the greatest for the previous year:

- Average earnings
- Prices as measured by the Consumer Price Index
- 2.5%

Due to the reduced income under the furlough scheme, when people returned to their normal wages in 2021, it meant that average earnings increased by 8%. So the State Pension would have had to also. As this wasn’t reflective of a regular increase in people’s earnings, the decision was made to suspend the triple lock system for 2022-23.

This means that in 2022-23, the State Pension value will rise with inflation or by 2.5%, whichever is greatest. The triple lock system isn’t gone for good and the government wish to return to it in the future.

2022 In April 2022, the State Pension amount will rise by 3.1% for the tax year 2022/23. This means the basic State Pension will rise to £141.85 per week, and the full new State Pension will go up to £185.15.