Contracted in or out pensions?

donsa

:mad: Can anybody please help me to understand the contracted in and out pensions. Currently I am contracted out and have been sent information tempting me to contract in?
Cheers Donsa

dunstonh

Currently I am contracted out and have been sent information tempting me to contract in?

There should be no tempting, suggesting or advising with any paperwork unless formal advice is being given. The exception maybe with recommendations made historically by tied sales reps and/or if you are invested in low growth potential funds.

Can anybody please help me to understand the contracted in and out pensions

its complicated and there is no hard and fast rule except if you are over 40 (female) or 43 (male) and should contract in if thats the case.

There is a contracting out of SERPS/S2P sticky at the top of the board. I suggest reading that backwards (its an old thread and posts early on will no longer be accurate for current rules). That will give an indication of the pros and cons of being in or out. However, if you have a legacy pension (pre 2001) then it may well be worth getting an IFA to review your pension and give advice on contracting in/out as older pensions are often not as good as newer ones (not always the case but in the majority of cases it is).

Debt_Free_Chick

Simple, easy to understand guide here