ABSTRACT
State provision in the UK is comprised of two tiers. The first tier is made up of the flat rate basic state retirement pension and means-tested benefits, while the second tier is comprised of State Earnings Related Pension Scheme (SERPS). The second tier in the UK is compulsory in the sense that individuals are either in SERPS or they have 'contracted out' of the state scheme into an alternative private pension scheme. Private sources of income, mainly from occupation pensions are also extremely important. Means-tested benefits, namely income support, housing benefit and council tax benefit, are payable to around three million pensioners in order to help them meet housing costs and supplement income. The total cost of means-tested benefits to pensioners is around £9.6 billion per annum. Government spending on health care and personal social services in 1997–98 was £53 billion.
