The Longfield Solar Farm (Amendment) Order 2026
The Pensions Act 2014 introduces comprehensive reforms to the UK pension system, primarily establishing the new single-tier State Pension, refining rules around State Pension top-ups and deferment options, and making consequential amendments relating to automatic enrolment, financial matters upon divorce, and the administration of pension schemes.
Arguments For
Implements significant reforms to the State Pension, aiming for simplification by replacing multiple previous schemes with a single, flat-rate State Pension.
Enhances individual choice and flexibility by providing options for individuals to accrue further pension entitlements through a voluntary agreement to defer the State Pension and receive higher pension payments later.
Strengthens the automatic enrolment framework established under previous legislation, ensuring more individuals are incentivized and required to save for retirement through workplace pensions.
Addresses financial aspects of marriage and civil partnership by introducing new rules regarding the sharing of National Insurance credits and pension benefits upon divorce or dissolution.
Arguments Against
The transition to the new State Pension introduced complexity during the transitional period, requiring protections and various calculations for those who had already built entitlement under the old system.
Critics argue that the flat-rate nature of the new State Pension might negatively impact certain groups, such as women or lower earners, who relied previously on earnings-related components.
Deferring the State Pension, while offering higher subsequent payments, requires individuals to manage without that income during the deferral period, potentially posing challenges for those with immediate financial needs.
The introduction of new NI credit rules upon relationship breakdown may create disputes or administrative burdens regarding the division of accrued state pension rights.
Part 1
The New State Pension
1. The New State Pension
(1) Subject to section 2, section 31 of the Pensions Act 1995 (the basic pension) is replaced by the new State Pension.
(2) The Secretary of State must publish a table showing the formula for calculating a person’s New State Pension amount. The table must include all periods of employment or self-employment which are to be disregarded in the calculation for the purposes of this section. The Secretary of State must review the table and the matter to which it relates not later than the end of the tax year 2020-21 and at least once in every subsequent five years.
(3) In calculating an individual’s New State Pension amount, the Secretary of State must have regard to the individual's recorded National Insurance contributions and credits for the purpose of determining entitlement to the basic pension under the Contributions and Benefits Act 1992.
(4) The Secretary of State may by regulations provide for any provision of this Part to have effect subject to such modifications as appear to the Secretary of State necessary or expedient to make—
(a) transitional arrangements in connection with the coming into force of any provision of this Part;
(b) any other changes that the Secretary of State considers appropriate in connection with the operation of the new State Pension.
(5) This section does not affect the operation of any provision of the Contributions and Benefits Act 1992 in relation to any entitlement to the basic pension that is determined wholly by reference to entitlement accrued before the coming into force of this section.
Part 1 focuses on replacing the existing basic State Pension with a 'New State Pension'.
The Secretary of State must publish and periodically review a table outlining the formula used to calculate this new pension amount, taking into account National Insurance contributions and credits.
Regulations can be made to manage the transition to the new system or make other necessary adjustments.
Importantly, this section clarifies that any entitlement to the old basic pension accrued before the commencement of this part remains determined under the previous legislation.
2. State Pension age
(1) Section 121B of the Social Security Administration Act 1992 (State pension age) is amended as follows.
(2) In subsection (1), for “The final pension age” substitute “The State pension age”.
(3) In subsection (1A), for “The final pension age” substitute “The State pension age”.
(4) In subsection (2), for “The final pension age” substitute “The State pension age”.
(5) In subsection (3)(a), for “the final pension age” substitute “the State pension age”.
(6) In subsection (4), for “the final pension age” substitute “the State pension age”.
(7) In subsection (5), for “the final pension age” substitute “the State pension age”.
(8) In the title of Schedule 4, for “Final pension age” substitute “State pension age”.
(9) The Secretary of State must review the State pension age under section 183 of the Pensions Act 2007 (review of State pension age) at least once in every five years, beginning with the first review that ends after the passing of this Act. An order under section 183(3) may not be made so as to bring into force a change to the State pension age before 2030.
This section modifies existing legislation to consistently use the term 'State pension age' instead of 'final pension age' throughout definitions concerning pension age calculations.
It also mandates that the Secretary of State reviews the State pension age every five years, starting after the Act passes.
However, any order made to change the State pension age cannot take effect before the year 2030, setting a minimum timeframe for implementing future increases in the qualifying age.
3. Entitlement to the New State Pension
(1) A person is entitled to the New State Pension if—
(a) the person is eligible for a basic pension under the Contributions and Benefits Act 1992 immediately before the coming into force of this section; or
(b) the total number of qualifying years in the person’s Scheme years is at least 30.
(2) Where a person is entitled to the New State Pension by virtue of subsection (1)(b), the Secretary of State must determine the amount of the New State Pension to which the person is entitled in accordance with regulations made by the Secretary of State.
(3) Regulations may make provision for the purposes of this section as to—
(a) what constitutes a “qualifying year”;
(b) what constitutes a “Scheme year”.
Entitlement to the New State Pension is generally achieved in one of two ways: either the person was already eligible for the former basic pension immediately before this change took effect, or they have accumulated at least 30 'qualifying years' in relevant 'Scheme years'.
If entitlement is based on the 30 qualifying years, regulations will specify the exact calculation method to determine the specific New State Pension amount.
Regulations also define what counts as a 'qualifying year' and a 'Scheme year' for these purposes.
4. Entitlement to New State Pension where no qualifying years
(1) If a person is not entitled to the New State Pension under section 3(1)(b) (that is, has fewer than 30 qualifying years), the Secretary of State must determine whether the person is entitled to a New State Pension under this section.
(2) A person is entitled to a New State Pension under this section if the person has at least one qualifying year.
(3) The amount of the New State Pension to which a person is entitled under this section is the amount calculated in accordance with regulations made by the Secretary of State.
(4) Regulations under this section must secure that the amount of the New State Pension to which a person is entitled under this section is the lesser of—
(a) the amount A determined by reference to the number of the person’s qualifying years; and
(b) the amount B determined by reference to the person’s entitlement to the basic pension under the Contributions and Benefits Act 1992 as it has effect immediately before the coming into force of this section.
(5) Regulations may make provision for the purposes of this section as to—
(a) what constitutes a “qualifying year”;
(b) what constitutes a “Scheme year”.
If an individual falls short of the 30 qualifying years required for full entitlement but has at least one qualifying year, they may still receive a reduced New State Pension under this separate provision.
The amount determined must be the lesser of two figures: Amount A, which is based on their number of qualifying years, or Amount B, which reflects what their entitlement would have been under the old basic pension rules just before the reform took effect.
This mechanism ensures that those with some National Insurance history, but not enough for the main tier, receive a benefit calibrated to their previous contributions.
5. State Pension starting amount
(1) For the purposes of Great Britain State Pension to which a person is entitled under this Chapter, not including any amount payable by virtue of section 4, the person’s State Pension starting amount is the amount calculated in accordance with regulations made by the Secretary of State.
(2) The Secretary of State must make regulations setting out how State Pension starting amounts are calculated under subsection (1). These regulations must secure that the State Pension starting amount is the greater of—
(a) 1/35th of the starting amount defined in section 39(1) of the Pensions Act 1995 (as it has effect immediately before the coming into force of this section) multiplied by the number of qualifying years in the person’s Scheme years; and
(b) 1/35th of the starting amount defined in section 39(1) of the Pensions Act 1995 (as it has effect immediately before the coming into force of this section) multiplied by the number of qualifying years mentioned in section 3(3) of the Pensions Act 1995 (as it has effect immediately before the coming into force of this section).
This section defines the 'State Pension starting amount' calculation for those entitled to the New State Pension, excluding any element derived from section 4 (the reduced rate category).
Regulations must ensure this starting amount is the greater of two base calculations.
Both options rely on a fraction (1/35th) of the former starting amount under the 1995 Act, multiplied by qualifying years.
One calculation uses the standard qualifying years, while the other refers specifically to the qualifying years used under the prior State Pension provisions.
6. State Pension deferral
(1) Section 50 of the Pensions Act 1995 (State pension deferral) is amended as follows.
(2) In subsection (1), for “the basic pension” substitute “the State Pension”.
(3) In subsection (2), for “the basic pension” substitute “the State Pension”.
(4) In subsection (3), for “the basic pension” substitute “the State Pension”.
(5) In subsection (4), for “the basic pension” substitute “the State Pension” where it first appears.
(6) In subsection (5), for “the basic pension” substitute “the State Pension” in each place.
(7) In subsection (6), for “the basic pension” substitute “the State Pension”.
(8) In subsection (7), for “the basic pension” substitute “the State Pension”.
(9) In subsection (8), for “the basic pension” substitute “the State Pension”.
(10) In subsection (9), for “the basic pension” substitute “the State Pension”.
This series of amendments updates cross-references within the Pensions Act 1995 regarding the deferral of State Pension payments.
Throughout section 50, the term 'the basic pension' is systematically replaced with 'the State Pension'.
This change aligns the legislation with the new framework, ensuring that the rules permitting individuals to choose to delay starting their State Pension payments—and consequently receive increased payments when they do claim—apply correctly to the newly established State Pension.
7. Increase of State Pension where deferral conditions are met
(1) Section 51 of the Pensions Act 1995 (increase of basic pension where deferral conditions are met) is amended as follows.
(2) In the title of the section, for “basic pension” substitute “State Pension”.
(3) In subsection (1), for “the basic pension” substitute “the State Pension” in each place.
(4) In subsection (3), for “the basic pension” substitute “the State Pension”.
(5) In subsection (4), for “the basic pension” substitute “the State Pension”.
(6) In subsection (5), for “the basic pension” substitute “the State Pension”.
(7) In subsection (6), for “the basic pension” substitute “the State Pension”.
(8) In subsection (7), for “the basic pension” substitute “the State Pension”.
Similar to the previous section, this updates the provisions in Section 51 of the 1995 Act that govern how the State Pension amount increases if an individual chooses to defer claiming it.
The section title and all references to 'the basic pension' are replaced with 'the State Pension'.
These changes ensure that the established mechanisms for calculating the uplift in pension payments due to deferral correctly apply to the payments calculated under the new State Pension structure introduced by this Act.
8. Treasury guarantee of State Pension
(1) The Treasury must guarantee payment of the New State Pension or any amount payable by virtue of section 4 to any person who is entitled to it under this Chapter.
(2) The Treasury must make payments to the Secretary of State in such manner and at such times as the Secretary of State may determine to enable the Secretary of State to discharge the Secretary of State’s liabilities under subsection (1).
The Treasury is legally required to guarantee the payment of the New State Pension (or the reduced amount under section 4) to everyone legally entitled to it.
To facilitate this, the Treasury must transfer necessary funds to the Secretary of State according to the Secretary of State's specifications.
This places the ultimate financial responsibility for funding the new pension scheme squarely on the Treasury.
9. State Pension: transitional arrangements
(1) The Secretary of State must make regulations making such provision as the Secretary of State considers necessary or expedient to secure that the coming into force of this Part does not prejudice any person’s entitlement to the basic pension under the Contributions and Benefits Act 1992 that is determined wholly by reference to entitlement accrued before the coming into force of this section.
(2) Regulations under subsection (1) may, in particular, make provision for the purposes of this section as to—
(a) the protection of a person’s National Insurance credits;
The Secretary of State must create regulations designed to ensure that no individual suffers a loss of entitlement to the basic pension they had already accrued before this Part of the Act came into force.
This is a mechanism to protect accrued rights during the transition.
These transitional regulations specifically allow for provisions protecting a person's existing National Insurance credits, preventing their past contributions history from being negatively impacted by the shift to the new system.
10. State Pension: National Insurance credits
(1) The Secretary of State must make regulations making such provision as the Secretary of State considers necessary or expedient in connection with the operation of—
(a) the new State Pension;
(b) this Part.
(2) Regulations under subsection (1) may, in particular, make provision for the purposes of this subsection as to—
(a) the calculation of the number of qualifying years for the purposes of the new State Pension;
(b) the circumstances in which a person is to be treated as having made Class 1, Class 2 or Class 3 contributions for the purposes of the new State Pension by virtue of National Insurance credits.
The Secretary of State is required to issue regulations concerning the operation of the New State Pension and this entire Part of the Act, particularly focusing on National Insurance credits.
These regulations provide detailed rules regarding how qualifying years are calculated for the new system.
Furthermore, they specify the conditions under which an individual will be treated as having made Class 1, 2, or 3 National Insurance contributions through the use of credits when determining their entitlement to the New State Pension.
11. State Pension: additional requirements for entitlement
(1) The Secretary of State may make regulations making such provision as the Secretary of State considers necessary or expedient in connection with the operation of the new State Pension.
(2) Regulations under subsection (1) may, in particular, make provision as to the circumstances in which a person is to be treated as having made Class 1, Class 2 or Class 3 contributions for the purposes of the new State Pension by virtue of—
(a) caring for another person for a prescribed purpose;
(b) being absent from work because of sickness or disability;
(c) being unemployed and available for work or actively seeking employment;
(d) the person’s caring responsibilities for a child under the age of 12.
This section grants the Secretary of State the power to create regulations setting out additional circumstances under which a person is treated as having made their required National Insurance contributions (Class 1, 2, or 3) for the purpose of qualifying for the New State Pension.
This covers scenarios beyond standard paid employment.
These include credits awarded for activities such as caring for another person, being unable to work due to sickness or disability, actively seeking employment while unemployed, or having specific childcare responsibilities for children under 12.
12. State Pension: treatment of foreign service
(1) The Secretary of State may make regulations making provision about the treatment of employment in the armed forces or in the employment of a public department of a country outside the United Kingdom for the purposes of the new State Pension.
(2) Regulations under subsection (1) may make provision as to—
(a) the circumstances in which a person’s employment in the armed forces or in the employment of a public department of a country outside the United Kingdom is to be treated as employment that attracts contributions under the Contributions and Benefits Act 1992;
(b) the circumstances in which a person is to be treated as having made Class 1, Class 2 or Class 3 contributions for the purposes of the new State Pension by virtue of such employment.
The Secretary of State can issue regulations detailing how foreign service, specifically employment in the armed forces or for a public department outside the UK, is handled when calculating eligibility for the New State Pension.
This addresses international portability of pension rights.
These regulations specify the conditions under which such employment will be treated as employment attracting UK National Insurance contributions, or when the individual will be deemed to have made the necessary Class 1, 2, or 3 contributions for the new State Pension system.
13. State Pension: persons outside United Kingdom
(1) The Secretary of State may make regulations making provision about—
(a) the entitlement of a person to the new State Pension in a case where the person does not satisfy the requirements of section 3(1) and the person is not ordinarily resident in the United Kingdom;
(b) the treatment of a person’s period of contributions for the purposes of the new State Pension in a case where the person is not ordinarily resident in the United Kingdom.
(2) Regulations under subsection (1) may make provision as to—
(a) the circumstances in which a person is to be treated as having reached State pension age for the purposes of section 3(1)(a).
Regulations may address the entitlement to the New State Pension for individuals who are not ordinarily resident in the United Kingdom and who do not meet the standard 30 qualifying years requirement.
This deals with expatriates and non-residents.
These rules can also stipulate how a non-resident's record of contributions is treated for the purposes of the new State Pension entitlement calculation, potentially including circumstances where they are treated as reaching State Pension age for the purposes of the prior basic pension section (3(1)(a)).
14. State Pension: modifications of provisions about deferred retirement
(1) The Secretary of State may by regulations modify the provisions of Part III of the Pensions Act 1995 (State pension, &c.)—
(a) for the purpose of giving effect to any provision of this Part;
(b) for the purpose of securing that the new State Pension is payable in accordance with this Part.
The Secretary of State has the power to modify Part III of the Pensions Act 1995, which relates to the State Pension and related matters, through secondary legislation.
This power exists to ensure smooth implementation of the new State Pension structure established by this Act.
These modifications are necessary either to directly facilitate any specific part of this Chapter or to generally secure that the new system is paid out as intended.
15. State Pension: linking State Pension to previous accruals
(1) The Secretary of State may make regulations as to the treatment of a person’s entitlement to the basic pension under the Contributions and Benefits Act 1992 immediately before the coming into force of this section for the purposes of the new State Pension.
(2) Regulations under subsection (1) may, in particular, make provision for the purposes of this section as to—
(a) the conversion of a person’s entitlement to the basic pension into an entitlement to the new State Pension;
The Secretary of State is empowered to create regulations dictating how an individual’s entitlement to the old basic pension (just before this Act took effect) is to be treated in the context of the new State Pension calculations.
This is crucial for ensuring historical contributions are recognized.
These regulations may specifically cover the formal 'conversion' of a person’s existing entitlement under the old system into an equivalent entitlement or credit within the framework of the new State Pension.
16. State Pension: transitional circumstances: Northern Ireland
(1) The Secretary of State may make regulations making provision about the application of this Chapter in relation to Northern Ireland.
(2) Regulations under subsection (1) may, in particular, make provision as to the treatment of any provision of Northern Ireland legislation relating to the basic pension for the purposes of this Chapter.
This provision allows the Secretary of State to issue regulations specifying how this Chapter, which establishes the new State Pension, applies within Northern Ireland.
This is necessary to align UK-wide legislation with devolved or pre-existing Northern Ireland social security laws.
Specifically, the regulations may cover how existing Northern Ireland legislation relating to the basic pension is factored into the entitlement and calculation rules set out here for the new State Pension.
17. State Pension: extent of repeal of provisions relating to basic pension
(1) The Secretary of State may by regulations repeal or amend any provision of the Contributions and Benefits Act 1992 relating to the basic pension to the extent that the Secretary of State considers necessary or expedient in connection with the coming into force of this Part.
The Secretary of State has the power to repeal or amend any part of the Contributions and Benefits Act 1992 that specifically relates to the old basic pension.
This power is enabled by the introduction of the New State Pension framework outlined in this Part of the Act.
This legislative power is used to purge obsolete or conflicting provisions from previous legislation once the new system is fully operational.
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