Additional State Pension (ASP)

This is paid in addition to the BSP.

Until April 2002, it was known as SERPS and depended solely on the National Insurance Contributions (NICs) paid as an employee.

From 6 April 2002, SERPS was reformed to provide a more generous ASP for low and moderate earners, carers and people with a long-term illness or disability. The reformed ASP, is based upon earnings on which standard rate Class 1 NICs are paid or treated as having been paid. This means that the ASP is an earnings-related pension.

The ASP provides a top-up to the BSP based on a person’s actual or deemed earnings. All employees have to contribute towards the ASP unless they make alternative arrangements by contributing to an occupational or personal pension scheme which is contracted out of ASP.

ASP is not available to self employed individuals. As a consequence of this self employed people pay lower NICs (Class 2 and Class 4) as opposed to the Class 1 NICs paid by employed workers.

Since April 2011 the ASP in payment has increased annually in line with the average increase in prices as measured by the Consumer Prices Index (CPI).

Division of the ASP on divorce

There is no such thing as Pensions Substitution for the ASP. If the ASP is to be divided up on divorce, the parties will need to arrange a pension sharing order on this pension. This works similarly to an internal share of a defined benefit pension.