Serps Review

nimrat_2 · 31 August 2011 at 3:57PM

I have been contacted by a company that wishes to see if I was wrongly informed regarding opting out of serps. [TEXT DELETED BY FORUM TEAM] They say there are no charges.........I have not done anything as the information they are requesting is not easily found! They are now going to send paperwork for me to sign so that they can look into it for me. Don't worry have been bitten once before and do not intend for it to happen again. I just wondered if anyone else had heard of this company ..........ALSO...........

I am totally ignorant regarding this serps thing - we did opt out when it initially was offered - on my father's recommendation. Unfortunately he died 16 years ago and I can no longer ask him questions on serps. If we opted out of serps do we still get the state pension. Neither my husband or myself pay into a personal plan and am now beginning to stress about it.

dunstonh · 31 August 2011 at 4:26PM

I have been contacted by a company that wishes to see if I was wrongly informed regarding opting out of serps.

I am not going to comment about the company in question but comment generically as I wasnt party to the conversation and dont know what they said....

There is a small handful of these companies around still. Most thankfully gave up after the FSA review. [TEXT DELETED BY FORUM TEAM]

I am totally ignorant regarding this serps thing - we did opt out when it initially was offered - on my father's recommendation.

That means it was not a mis-sale as your father is to blame.

However, the going by the FSA flowchart, the key point is whether you were aged under 45 at the point of contracting out. If yes, then you were not mis-sold. If no, then you were mis-sold.

Quite a few companies that still operate in this field do it not to find out if you were mis-sold but so they can find out your pension details and then tell you that you can transfer it to something cheaper or better. In the process they take around 5% commission on the transfer value.

Thankfully, that will banned within 16 months but for now, they can get away with it.

If we opted out of serps do we still get the state pension.

The basic state pension is unaffected by contracting out. Only the SERPS/S2P element of the state pension is affected and only in relation to the period you were contracted out.

Neither my husband or myself pay into a personal plan and am now beginning to stress about it.

What is it you are stressing about? Your lack of pension or the fact a cold calling company has spun some ideas in your head which are statisically unlikely to be the case?

dmwg40 · 9 September 2011 at 12:01PM

Thanks for this post it helped alot.

just knowing i was not missold

i opted out in 1991 when i was 20.

Loughton_Monkey · 9 September 2011 at 3:03PM

nimrat wrote: »

... Neither my husband or myself pay into a personal plan and am now beginning to stress about it.

This is indeed something to get stressed about - if you are not saving enough for retirement. Most people are not.

But don't get stressed about your SERPS. An awful lot of people opted out, and it's all pretty marginal anyway. Any differences between what you will get and what you would have got are likely to be peanuts.

You should never listen to firms like this that contact you out of the blue. So once you kick them into touch, then go to a 'proper' advisor [probably an IFA] and talk about making proper retirement provisions before it's too late.

atush · 9 September 2011 at 5:11PM

I agree with LM, you need to start saving into a pension NOW. If your employer has one, join it. If you both pay tax and they don't , start up a personal pension. And save into CASH and S&S ISAs too. You have lost ground to make up, so get running.

jamesd · 9 September 2011 at 5:45PM

You opted out at just about the perfect time, it was probably a very good move. You should get a State Pension Forecast to find out what you can expect from the state pensions.

If you're still contracted out that will end from next April when contracting out is abolished for everyone. Your pension pot from contracting out will remain, all that'll happen is that like those who didn't contract out you'll start accumulating some Additional State Pension income, in addition to the better known Basic State Pension.

As with all pension pots you should periodically consider how your contracted out (called Protected Rights) pension pot is invested and whether it is best to leave it where it is or move it.

xgingerx · 6 February 2012 at 7:49PM

Bump does anyone have any advice ref serps review , I have worked all my life 20 years and my SERPS pot is only 5k can this be right ? NB I have a reasonably above average pay ? Seems low ? Or is it normal

Thks

xgingerx · 7 February 2012 at 12:28AM

Employed and still opted in, well until april this year when I goes back, maybe I'm worrying about nothing as I've no idea what is right and wrong, obviously 20 years ago I was told it was the right thing to do opting out, hopefully as I'm only 40 this year no damage Is done ? 5k just didn't seem much but honestly don't have aclue

dunstonh · 7 February 2012 at 9:37AM

Employed and still opted in, well until april this year when I goes back, maybe I'm worrying about nothing as I've no idea what is right and wrong, obviously 20 years ago I was told it was the right thing to do opting out, hopefully as I'm only 40 this year no damage Is done ? 5k just didn't seem much but honestly don't have aclue

I suspect that £5000 would only be a couple of years rebates (depending on your income). Ask the insurer for a list of payments received. Contracted out rebates are annual. So, it wont be a long list but it will show you the years that they were received and the amounts. Also apply for a state pension forecast. This will tell you what additional state pension entitlement you have built up. If you have been contracted out for all of the possible period you would have no SERPS or State second pension entitlement.

honizz · 13 February 2012 at 8:19PM

Hi, I noticed that you were talking about Serps. I have a claim going through against Abbey Life at the moment. I opted out when I was 35. Smooth talked I seem to remember, told that State pensions wouldnt be around when I retire and that I would absolutely be better off opting out. As far as I can see, State pensions are still around and noone can tell me if am absolutely better off having been out of Serps. The gist I get from this site is that 1.5% have been missold, I can't find out how many people were told to opt out? Does anyone know?

dunstonh · 13 February 2012 at 9:30PM

told that State pensions wouldnt be around when I retire

Which actually may be coming to fruition as the Govt has proposed the abolition of S2P/SERPS. Early indications are that those that contracted out would be better off financially.

As far as I can see, State pensions are still around and noone can tell me if am absolutely better off having been out of Serps.

In 1996, the SIB did a review and found that everyone who had contracted out up to that point was financially better off. In 1997, Labour got into power and reduced the rebates. This made contracting out harder to beat contracting in. Since then, its generally been cost neutral with the main benefits being no linked to state pension age and the ability to get 25% tax free cash.

Its quite easy to see if you have been better off by contracting out. However, you have to speak to the right people. It is not something you can guess.

The gist I get from this site is that 1.5% have been missold, I can't find out how many people were told to opt out?

It was just under 1.5% and it was only potentially mis-sold. Not actually. Over 8 million were told to contract out. Data was published by the FSA.

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