Citation and commencement

1. This Order may be cited as the Social Security Pensions (Flat Rate Accrual Amount) Order 2012 and shall come into force on 6th April 2012.

Flat Rate Accrual Amount

2. For the purpose of paragraph 13(2) of Schedule 4B to the Social Security Contributions and Benefits Act 1992(2), the flat rate accrual amount for the tax year beginning 6th April 2012 and subsequent tax years shall be £88.40.

EXPLANATORY NOTE

(This note is not part of the Order)

This Order is made following a review by the Secretary of State under section 148AA(1) of the Social Security Administration Act 1992 (c.5) of the general level of earnings in Great Britain with a view to determining whether, and if so by how much, the general level of earnings has increased during the period from 1st October 2004 to 30th September 2011. As a result of that review, it appears to the Secretary of State that the general level of earnings during that period has increased by 21.9%. This Order therefore directs, in accordance with section 148AA(4) of that Act, that the flat rate accrual amount for the tax year beginning 6th April 2012, and subsequent tax years, shall be £88.40.

The flat rate accrual amount is a flat rate cash amount of additional pension which applies to accruals in the first earnings band under Schedule 4B to the Social Security Contributions and Benefits Act 1992 (c.4). This method of calculation of additional pension applies from the flat rate introduction year, which by virtue of the Social Security Pensions (Flat Rate Introduction Year) Order 2011 (S.I. 2011/2953) is the tax year beginning 6th April 2012.

A full impact assessment has not been produced for this instrument as it has no impact on the private sector or civil society organisations.