When the State Pension deduction is applied

In common with many DB schemes, the purpose of a State Pension Deduction was to take into account the basic State Pension being built up throughout your membership of the Scheme.

The deduction was originally applied at the age State Pension was paid. However, over the years, the Government has changed the State Pension age and it remains under review as life expectancy continues to rise.

As these changes were introduced, the Trustee reviewed whether this impacted how the deduction was applied under the Scheme Rules and if any updates were required by law. When the deduction is applied is not the same for all members and it depends on your period of membership in the Scheme and the Scheme Rules that apply to your pension.

When the deduction is applied

If you joined the Scheme on or before 31 December 1995:

The deduction is applied at either age 65 or (if earlier) your State Pension age. However, if you’re a female member who stopped earning benefits in the Scheme before 1 January 1997, any part of your deduction earned before 17 May 1990 applies at age 60.

The date that applies to you will have been provided on:

  • The statement you received when you stopped earning benefits.
  • Retirement estimates you may have requested.
  • Any subsequent letters in relation to the deduction. 

You can find the current amount of the deduction by logging into your pension account on the M&S Pension Scheme Portal , viewing the ‘Retirement Illustrator’ and choosing a Preferred Retirement date before age 65.

If you joined the Scheme on or after 1 January 1996:

The deduction was taken into account when you stopped earning benefits and we calculated the pension you had earned. The information provided below does not apply to you.

Why the date of the deduction may be different to your State Pension age

Due to a change in law in 1990, the Government was required to make sure that the age the State Pension was paid was the same for men and women. Under the Pensions Act 1995, it gradually increased the State Pension age for women so that by April 2020 it would be age 65 for everyone. 

In 2011, the Government accelerated this plan so that the State Pension age became 65 for everyone by 2018. It has increased since and remains under review as life expectancy continues to rise.

The Trustee has a legal obligation to apply the deduction at the date set out in the Scheme Rules (as described above). This means that for some members the date the deduction is applied is not the same as when their State Pension is put into payment.

What you should do

The State Pension Deduction is applied to your pension automatically and we write out to you around six months before it is applied to remind you when it will be applied, and then a month before it is applied to confirm how much will be deducted. It’s important that you’re aware how much the deduction is so that you account for it in your future finances. 

Most members can find the current amount of the deduction by logging into the M&S Pension Scheme Portal, viewing the Retirement Illustrator and choosing a Preferred Retirement date before age 65. If you’re not able to find this on previous documents or by logging into the M&S Pension Scheme Portal, you can contact the Pension Administration Team for this information.

You should also check your State Pension age, which is easy to do by entering a few details on the Government’s website.

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