Sorry, another S2P (SERPS) thread!!!

Badgers_Armpit

Hi, apologies first - I guess this subject has been done to death. But I would like to hear some people’s thoughts on this:

I took out a private pension when I was about 22 (9 yrs ago!) - my then employer was also contributing into it. Anyway, I was contracted out of serps. I stopped paying into this pension when I was about 25.

I now have another pension which my current employer also contributes to (opened when I was 26). I guess I need to make a decision on S2P. Do I contract back in or swap it over to my current pension?

I would guess that leaving it in my old pension is the worst scenario. I'm paying (quite a bit) more into my current pension; although my old one has a head start!

Reading the threads on here, I'm more inclined to stay out than contract back in. Would contracting out to my newer pension then sound the better choice?

Also, is there any chance I can get the money from my old pension & re-invest it somehow or is it locked away till the retirement age on the pension (55).

Cheers
BA

Milarky

It sounds as though you are contracting-out as an individual rather than 'through' either employer (is that correct?)

You can only have one 'Appropriate personal pension' (one that receives the government rebate when you contract out, in other words) running at the same time. AFAIK this means that you 'have to' have those rebates going to your existing arrangement even if you have since started a new personal pension elsewhere. Thus all your years of contracted out rebates will always gather in the same account. For this reason it is sensible to review the account itself (in addition to contracting decision) to make sure it continues to perform well and remains competitive on charges and, if necessary, arrange a transfer to your new plan.

After 'A' day your old pension will be harmonized with everything else so that you will (for the first time) have access to the same lump sum on the rebates as on your own personal contributions. The age limits will be aligned, too, so that it will be 55+ (given you are not under 45 now) before you can do this.

Assuming you have a stakeholder or stakeholder-style arrangment you can certainly perform 'switches' of the investment already there depending on how many funds there are. But's that's the only kind of 'reinvestment' generally available - it must stay in the pension wrapper.

dunstonh

I was given an independent research report on the suitability of contracting out and it was excellent. Everyone seems to be scared to make a choice on what is best (unless its obvious). This report put all the pros and cons in and offered different opinions on the importance of those pros and cons. Best one yet.

Alas though, it is about 5 pages so its no something I could copy and paste here. If you want a copy though, I could email it to you. PM me your email if you do.

Badgers_Armpit

dunstonh - you have mail, thanks.

Both of my pensions are personal ones so I would say I'm contracting out as an individual.

Guess I need to seek further advice to find the best route for my pensions & S2P.

thanks.

dunstonh

Its on it's way to you now

EdInvestor

BA


Assuming you are happy to remain contracted out, what you could do is transfer PP1 over into PP2.

But before doing this you should check the following about both pensions:

The charges you are paying
The funds offered and their performance

Obviously if PP1 is better than PP2 (unlikely) you shouldn't merge them.

and about PP1 you should also check

Any guarantees you might have if it is invested in a With profits fund
Any transfer penalties you might have to pay on exit which might mean it's a bad idea to move at this time.

Having got hold of the info on this, you might like to ask for more opinions here