THE STORY OF A MOVEMENT

2000s

1900s

1800s

1700s

1600s

1500s

1100s

Like many threads of history, the occupational pensions movement developed at a slow pace throughout the Middle Ages; it gained momentum as a concept in the 1800s and by the end of the twentieth century, it was well and truly a staple feature of our social and economic life.  Ultimately it is the story of how business, charities, the state and individuals, shared responsibility for protecting people’s well-being and financial security when they could no longer work. We have highlighted some of the key milestones from our archives below, but a more detailed breakdown of the history, together with citations, bibliography and FAQs, is available as a downloadable PDF document.

2000s

The twenty-first century marked a major shift in UK pensions with the introduction of automatic enrolment for workers, leading to a significant increase in the number of employees enrolled in a pension scheme. Changes were also made to State pensions policy, particularly raising the state pension age, and changes made to pensions tax relief contributed to the growing unwillingness of employers to underwrite final salary schemes. Discrimination continued to remain a focus of debate. Together, these changes reflect the ongoing efforts to balance the sustainability of the pension system with changes in life expectancy and the evolving demographic and economic landscape in the United Kingdom.

Current
Current

Various amendments were further made to the Pensions Act which introduced a new mechanism to review and adjust the state pension age based on changes in life expectancy. This was intended to ensure that the state pension age reflects demographic trends and remains financially sustainable. The state pension age is expected to reach 67 by 2028.

The 21st century has seen the continued decline in private sector occupational schemes and the need to adapt to a private sector increasingly dominated by defined contribution provision. (particularly on a final salary or defined benefit basis)

2020
2020

The State Pension Age for all increased to age 66.

2018
2018

The State Pension Age for women increased to age 65.

2014
2014

Pension ‘freedoms’ were introduced.

2012
2012

Automatic enrolment legislation, albeit at low contribution levels, began to take effect with the object of increasing pension savings among workers not covered by other schemes.

2011
2011

The Pensions Act was amended to accelerate the process of equalising the state pension age for men and women to age 65 by November 2018, and a state pension ‘triple lock’ is introduced.

2010
2010

The Equality Act was introduced and required pension schemes to operate a non-discrimination rule. The State pension age for women started to increase in stages to age 65 to equalise with the male state retirement age.

2008
2008

The Pensions Act introduced automatic pensions scheme enrolment, requiring employers to automatically enrol eligible workers into a qualifying workplace pension scheme. The policy aimed to increase pension savings and address concerns about under-saving for retirement

2005
2005

Employer debt provisions on a buy-out basis are extended to the employer leaving the multi-employer scheme. This has a major impact on corporate transactions, with further complex regulations becoming necessary to ameliorate the effect.

2004
2004

The Pensions Act introduced the Pensions Regulator with tough enforcement and anti-avoidance, or ‘moral hazard’ powers, and the Pension Protection Fund financed by levy on all pension schemes. Regulations prescribe that the debt on the employer – the difference between assets and liabilities on wind-up – is calculated on a full buy-out basis. Consequently, final salary pensions risk becomes a major factor in commercial transactions.

2001
2001

Stakeholder pensions (a type of personal pension) were introduced to encourage more long-term retirement saving.

1900s

The twentieth century saw a massive increase in both the number of pension schemes operating within the UK and the proportion of the population participating in company pension schemes. There were some crises of pension fund management which highlighted the importance of robust regulation and ultimately, sound and ethical management. Public discussion continued to address contentions around discrimination in the provision of pensions, on the basis of gender and other important factors. Near the close of the century, focus shifted to the risks associated with private pension schemes leading to inquiry and legislation to mitigate the risks of mis-management.

1995
1995

As the pensions industry developed and expanded over the course of the twentieth century, governments sought to apply regulations to pension schemes to protect members’ benefits, in part in response to incidents in which pension scheme members were in danger of losing their pension savings such as the Maxwell Scandal. In the wake of this incident, the Conservative Government set up tighter regulation of pension schemes and limited compensation mechanisms for members in the 1995 Pensions Act.

1991
1991

Media Proprietor Robert Maxwell dies. It is then revealed that he had misused £450m of his group’s pension fund. The ‘Maxwell Scandal’ becomes the catalyst for law reform in the realm of pensions’ management regulation.

1970
1970

78 percent of non-manual, 50 percent of manual and 38 percent of unskilled manual workers were members of company pension schemes.

In the late twentieth century privatisation led to many workers being transferred from public sector pension schemes into private company schemes, and changes to tax legislation in 1988 saw many employees move over to personal pension schemes from their employer’s pension scheme. The latter trend led to a number of compensation claims from those who had been mis-sold inferior personal pensions.

1975
1975

A Labour government introduced SERPS, the State Earnings Related Pension Scheme, in the Social Security Pensions Act. This was a secondary state pension linked to earnings, which supplemented the basic state pension. Employees in occupational schemes could contract out of this pension and make lower National Insurance contributions.

1959
1959

A National Insurance Act introduced a top-up state pension scheme, based on earnings, which was also known as the graduated pension. This pension was not redistributed.

1942
1942

The Beveridge Report is released showing findings of the Exceptional Needs Enquiry that 70 percent of old aged pensioners lacked basic essential items such as adequate clothing and fuel, medical treatment and a nourishing diet. The report proposed a universal flat rate pension based upon the minimum income needed for subsistence. These recommendations influenced the introduction of a universal contributory state pension in the National Insurance Act of 1946.

1942
1942

The Scottish Old Age Pensions Association and National Association for Old Age Pensions Associations (established 1937 and 1938) were merged as the National Federation of Old Age Pension Associations. All three organisations campaigned for improvements to state pension provision.

1940
1940

The Old Age and Widows’ Pension Act broadened the benefits available to women by reducing the pensionable age to 60 for unmarried insured women and the wives of insured male pensioners, with an associated increase to women’s contributions.

1936
1936

By 1936, 6,544 private sector schemes were in operation (the majority – 4944 – for administrative or clerical staff), which leaped to 37,000 (covering 1 in 3 workers) in 1956.

1935
1935

The National Spinsters’ Pensions Association (NSPA) is formed and campaigned for state pensions to be provided to women at an earlier age, on the basis that women normally had to give up work earlier than men. The NSPA had a membership of 150,000, mainly textile workers. Its claims were investigated by a Parliamentary Committee but their demands were dismissed at the time.

1925
1925

The Contributory Pensions Act saw a Conservative government introduce a contributory state scheme for manual workers and others earning up to £250 a year. This scheme provided a pension of 10s a week (around £15 today) from the age of 65.

1922
1922

A uniform pension scheme for local government staff was established.

The inter-war period saw the establishment of industry-wide pension schemes including:

  • Fine Cotton Spinners Association (1919)
  • Bleachers Association (1926)
  • Bradford Dyers Association (1925)
  • Electrical Goods Industry
  • Motor Industry (1930s)
  • Flour Milling Industry Pension Scheme (1931)
1916
1916

The National Conference on Old Age Pensions campaigns for pensions to increase in line with inflation.

1908
1908

A state pension was first established in 1908 for a limited section of the older population, and this coverage and provisions of the state pension continued to develop over the course of the twentieth century and into the twenty-first.

1906
1906

Cadbury and Rowntree’s set up worker pension schemes

1800s

Prior to the advent of the state pension and the broad provision of occupational pensions in the twentieth century, support for people in old age was piecemeal and patchy. People could look to the parish for support, but the stigma associated with this only increased with the amendments made to the Poor Law in 1834. Civil service pensions expanded, and charities continued to make an important contribution to supporting people in old age, with money, fuel or other benefits. By the second half of the century, we see the emergence of the first private sector pensions schemes for workers, widespread adoption of schemes by the railway industry and the first pension funds for nurses.

1890s
1890s

The 1890s saw other public sector employees being granted pensions modelled on the civil service scheme, including teachers, the police (1890) and poor law officials (1896). Also during this decade, the UK government set up two committees to investigate the viability of a citizen-wide state pension, following the introduction of the world’s first state pension scheme in Germany.

1880s
1880s

In the 1880s, a number of campaigns and pressure groups emerged to campaign for the introduction or extension of a state pension. Most notabley, the Rev F.H. Stead founded the National Committee of Organised Labour for the Promotion of Old Age Pensions in 1898.

1880s
1880s

Colmans begins a company pension scheme

Several other companies including Courtaulds, Boots, Kenricks, and J & P Coats also set up pension schemes for their staff in the late nineteenth and early twentieth century.

1894
1894

WH Smith begins a company pension scheme.

1887
1887

The National Pension Fund for Nurses was founded by Henry C. Burdett. Its chief object was to provide nurses with a retirement income or allowances for those unable to work through sickness or accident. The Fund was open to ‘all responsible paid officials connected with hospitals and kindred institutions’ and was based upon the contribution of members, the profits made from investments of these contributions, and a Donation Bonus Fund.

1887
1887

Reuters begins a company pension scheme

1874
1874

Reuters begins a company pension scheme

1841
1841

Railway companies were some of the earliest employers to arrange pension benefits for their staff as a means of retaining staff. These funds were set up by Acts of Parliament, and were run by directors and officers who formed a committee to operate and set benefits and contributions. Most provided benefits produced from a combination of members and company contributions. Many railway companies establish pension schemes for staff during the middle of the century and a pamphlet on Railway Superannuation Funds written by D. Macgregor in 1887 suggested that there were 10 pension schemes in operation at that date.

1841
1841

One of the earliest private occupational pension schemes is established – the Chartered Gas Light and Coke Company Superannuation Fund.

1834
1834

Amendments were made to the Poor Law legislation which led to a much harsher regime aimed at deterring the so-called ‘undeserving’ poor from relying on support from the parish. The Act grouped parishes together into Poor Law Unions, with Unions operating central workhouse for groups of parishes. Inmates of the workhouse experienced harsh conditions, a plain diet and were expected to work, often at menial tasks, if capable of doing so. Charities made an important contribution during this period.

Early 1800s
Early 1800s

Civil service pensions continued to expand, with further pensions being granted during the early eighteenth century in, as a means of retaining staff and encouraging an ethos of duty and probity within the civil service. It replaced an informal system of government officers receiving payments from their successors, a system open to corruption. This system was extended to all grades of the department in 1806-7 and across the civil service in 1810. A separate pension scheme for senior officials was established in 1803.

1700s

While not fully developed in the 18th century, discussions and debates about the need for state-sponsored old age pensions began to gain traction. Various proposals were put forward by social reformers and politicians to address the financial challenges faced by the elderly which laid the groundwork for more comprehensive pension systems that evolved in the following centuries.

1793
1793

The Friendly Societies Act provided legal recognition and some regulation for these early mutual aid organisations and marked an early step towards formalising the provision of financial support to members.

1782
1782

Gilbert Act is passed and allowed parishes to combine resources to create workhouses for the poor and elderly.

1739
1739

The first company pension schemes were set up in the late seventeenth century in private firms associated with the government, such as the Bank of England and East India Company. At the Bank of England the first pension was granted in 1739 and further grants were made on a discretionary basis.

1730
1730

The “Old Gloucester Friendly Society” is founded, playing a crucial role in the development of the Friendly Society movement. These mutual aid organisations pooled their resources to provide financial support to members during times of need, such as illness, old age, or death. Some friendly societies began to offer annuities or regular payments to members in their old age.

1712
1712

A Superannuation Fund for the lower ranks of the Custom and Excise Department was established, with officers receiving a third of their final salary on the conditions of making a regular yearly contribution, seven years’ service and good behaviour, which was payable when staff were unable to continue regular employment.

1600s

During this period most people were dependent on the support of family members, charities, or the parish poor relief system to support them in old age, however legislation was enacted which grounded responsibility for elderly care with local parishes. In the second half of the century, the world’s first lifetime state pension was introduced, and the UK’s first civil servant received a state pension.

1684
1684

Martin Horsham, an official in the port of London, is the first person to receive a civil service pension.

1684
1684

A state superannuation scheme for retired Royal Navy officers was introduced and is believed to be the first occupational pension scheme in the world to provide lifetime pensions on retirement due to old age. There was no fixed retirement age, and the pension, which was 100 per cent of salary and allowances, became payable to any officer who became unfit for performing his duties because of age, provided he had completed at least 15 years’ service.

1601
1601

The newly enacted Poor Law made parishes responsible for the care of their aged and needy, and for the following two hundred years, assistance generally took the form of ‘out-relief’ (payments or support enabling recipients to stay in their home) or ‘in-relief’ in a local workhouse.

An Act of Parliament also established a pension scheme for maimed soldiers and mariners.

1500s

What is believed to be the world’s first occupational pension fund of some sort is created.

1590
1590

A pension scheme known as the ‘Chatham Chest’ was established to provide a pension to wounded sea men of the Royal Navy. Each month 5% was deducted from seamen’s wages and paid into the chest. Pensions were payable on a fixed scale according to the degree of injury. These were payable for life but were regularly reviewed and could be reduced or terminated if the pensioner was found to have recovered sufficiently to be capable of employment.

1100s

The concept of non-familial financial support being given for retired workers began to gain some traction in medieval times as society sought to safeguard the well-being of the aged. This was delivered in a variety of ways but was seldom consistent and many were not fortunate enough to benefit.

The Middle Ages
The Middle Ages

Examples of how ‘pensions’ were provided during the Middle Ages:

  • The King might award a royal pension for service to the Crown either as money, land or appointment to a lucrative office.
  • Guilds provided some pensions as part of almshouses for the poor.
  • Landowners may exchange use of their land to a tenant in exchange for cash or crops.
  • Some clergy received pensions.
  • Some select groups of civil servants received small pensions.
1180
1180

The earliest identified record (according to C. G. Lewin) of a clergy pension was an agreement reached at the Exchequer Court in 1180 that two clerics, who held the church of Black Bourton in Oxfordshire, should be dispossessed and consideration given to awarding them a pension.