Opting out of Serps - can I reclaim?

Is there really still claims companies conning people with this? - obviously so.

I have been contacted by a cold caller who says that if I opted out of Serps I could reclaim ALL that money back.

no you cant. That is complete and utter bull.

I have had my pension for nearly 25 years. It passed from the civil service over to the compnay I work in now in 1992.

You contracted out with the civil service as it was mandatory. It was also not sold to you. So, on two counts you could not have been mis-sold. You dont say what your current pension is. However, you really cant be mis-sold contracting out on occupational schemes.

He told me that all the contributions to a State Pension from my Natioanl Insurance contributions could be released to me now.

That is a complete and utter lie. There isnt even a jot of truth in it.

I know nothing about pensions or Serps to be honest. If this is correct, then I assume I can do this myself without the aid of a financial adviser who will undoubtedly take their cut.

The person that phoned you isnt a financial adviser. They are a scumbag sales rep for a dodgy claims company trying to obtain an upfront payment from you.

Please name the company as there have been a few like this over the years that have done similar cold calling scams and they have been shut down. Unfortunately, not until people paid money to them first. So, naming them will help other people avoid them if they can.

I am still on the same pension that was transferred from civil service to company I work in by the way. My company has been topping up the funds to cover the shortfall. By all intents and purposes it is no worse or better than any others I guess.

That also confirms that it is impossible for you to have been mis-sold. Occupational pensions are either defined benefit (based on years of service) and these are often contracted out or defined contribution and would either be COMPs or CIMPs (Contracted IN/OUT Money Purchase scheme). You dont get a choice. You get what the scheme gives you. You also do not use an adviser so get none of the consumer protection that goes with it.

As time goes on it would be dreadful to think that all that money is lost if the company goes bust or the funds fall short. (Although I gather it is protected if the company goes bust that is).

No pension funds have failed to date. Some defined benefit schemes have failed but because of those, protection was brought in so its not seen as a concern nowadays.

Makes you wander whether you should opt out of a pension altogether these days.

You would be daft to. Nothing else comes close to providing anywhere near the same level of benefits that a pension with employer contributions (direct or indirect) gives you.

Ok Thanks for that. I thought it sounded too good to be true. I am afraid I did not catch the Company name as he talked very quickly. Asked me to find out some of my pension details from Work and HMRC and said he would call me back later today. So, if he does, I will find out as much as I can.

Please do and dont fall for any sales pitch. This person cold calling you will not be qualified or authorised to recommend pensions or provide pension advice. They only authorisation they have is from the MoJ to be a claims company (And some dont even have that). The MoJ authorisation is not indication of standards of knowledge. You could be authorised by the MoJ within weeks if you wanted to be and start making cold calls like this. Despite having no knowledge or understanding.

There is no way you could have been mis-sold. Doesnt matter what they tell you. You had no choice in the matter as the scheme set that and they dont have to give a choice. I have come across scam companies like this before. We had a cold calling woman phone up many people in the past in our area and was telling them the same sort of rubbish.

As it happens, for most people nowadays, contracting out when they did have the choice, will end up the best option. Even going back in time, in 1996 the SIB did a review of contracting out and found that everyone who contracted out up to that point was financially better off. It dropped a bit after 1997 when Labour introduced a stealth tax (by reducing rebates) but still stayed above the 50% mark. The FSA did a review of contracting out about 3 years ago and found on personal schemes where people did have choice, only around 1.5% of the people were potentially mis-sold. So, given that means some of those wouldnt have been, it would be around less than 1%. Thats a very low failure rate. This is why you don't see the genuine claims companies cold calling in this respect. Plus, if you happen to be in that 1% where it has been mis-sold, you dont see the money. Any redress is paid into your pension. However, the scam company then bill you for a percentage of that which you have to find out of your own pocket.

If you didn't contract out the money would gain you Additional State Pension payments at a level related to your income. This is one of the safer places, though flat-rating and a possible minimum payment may make this pointless if it happens.

Contracting out to a work final salary pension scheme is normal for that type of scheme and these schemes are usually the best value for money in the whole pension world. The government-backed ones are very safe,almost as safe as Additional State Pension. Private ones are a bit less safe but the Pension protection Fund provides at least 90% of the money protection up to something over £20,000 a year of pensions income, though the rules for pensions not being paid are a bit more fiddly. You should read their literature if you want to know more but the basic part is that those who aren't higher rate tax payers are very well protected, while those who are might lose out significantly, depending on just how much pension they have accrued.

Contracting out to a personal or group personal pension, including work personal pensions where you can choose the investments and have those investments tracked by how many you own are less safe. Also called money purchase pensions. Less safe because how much pension you get depends on how well the investments you choose perform. There's no guarantee of how much that income will be. The investments themselves are extremely well protected against fraud and general loss risk, but not at all against investment performance, which is your responsibility to manage.

Since you've been contracted out into a work defined benefit scheme you can't have lost out and can completely ignore what you're being told.

For those in money purchase pensions it's possible to take 25% as a tax free lump sum at any age from 55 onwards. For others it depends on the scheme rules.

telboy63 wrote: »

Now I'm confused ..... my brother just got back £13,000 from claiming back his serps payments!

The success rate on SERPS complaints is about 1.5%. So, someone has to fall in that 1.5%. It has the lowest complaint uphold rate of any financial product.

Most people who contracted out are financially better off. However, some insurers are not checking this first. For example, if your state pension forecast shows you are getting the full state pension and you contracted out then you are better off. If you hadnt contracted out you would get the same state pension but wouldnt have any of that contracted out former protected rights money.