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Updated: Aug 20, 2021

A regular payment paid to a retired person. It may be paid by the government or by the person’s ex-employer. In the United Kingdom retirement pensions are paid by the state and are due to the recipient by virtue of national insurance contributions. State pensions are continually being reviewed as the cost of living increases, and the system has been considerably improved by the introduction of the state earnings-related pension scheme.

In the private sector, many businesses tend to adopt certain responsibilities for long-serving employees on their retirement, particularly where insufficient provision is made by the government. Pensions paid in the private sector may be based on contributions made during the claimant’s working life or may be non-contributory pensions. In the latter category one may include ex gratia pensions awarded occasionally by business organizations to selected employees. Pensions are also awarded to widows. These are called widows’ pensions and are payable through the National Insurance. Such widows’ pensions are also often paid by businesses in the private sector.

Reference: The Penguin Business Dictionary, 3rd edt.

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James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.