SP2 conditions

waltzer

Can anyone tell me where I might find out what % of NI contribution goes into SP2 opt out? I understand it's dependent on age? Also, at what age can one take these Protected Rights contributions as a pension? Is it only at 65? I've looked at pensions website but can't find info.
If someone has a pension pot made up from personal contributions and SP2 opt out are these effectively treated as separate pots? That is, is one compelled to buy a dual life annuity from the Protected Rights pot whereas one can buy a single life from personal contributions?
If I transferred the entire pot from WP to funds would they also then be treated as different pots with different conditions applicable?
I'm not being lazy (honestly). I just can't find anything...

dunstonh

I understand it's dependent on age?

it is.

Can anyone tell me where I might find out what % of NI contribution goes into SP2 opt out?

It changes each year (although the Govt have set figures for multiple years at times, including the final 3 years). What years did you want to know?

Also, at what age can one take these Protected Rights contributions as a pension? Is it only at 65? I've looked at pensions website but can't find info.

Any time between age 50 and 75 (55-75 from 2010).

If someone has a pension pot made up from personal contributions and SP2 opt out are these effectively treated as separate pots?

yes and no. Protected rights and ordinary rights have different rules applying to them at the moment (expected to be abolished some time after 2012) and providers need to show them apart. However, for things like fund based discounts, they usually consider them as one pot.

That is, is one compelled to buy a dual life annuity from the Protected Rights pot whereas one can buy a single life from personal contributions?

One annuity is standard with two segments within it.

If I transferred the entire pot from WP to funds would they also then be treated as different pots with different conditions applicable?

A with profits fund is just a fund. Changing funds has no impact whatsoever on how they are treated.

waltzer

Thanks dunston. As usual an excellent reply. I was wondering about age 53-56 as these are the final 3 years that these will be put into my opt-out pension fund (currently at 20K). Is this what you mean? I was trying to find out from provider what my pot would amount to if I began paying in 200pm plus the SP2 opt out money to the current pot but they can't tell me. I was naively presuming that they might be able to project what current 20K would grow to over the next 5 or 6 years if I began to contribute spare cash on a monthly basis (plus a few more years of SP2 opt out). I would then end up with a pot consisting of PR money and personal cont money but I've no way of knowing what this might amont to as a combination. Maybe I've got the wrong idea? Maybe I can't/shouldn't view the 20K as a starting point for future growth of personal conts? It's two pots that you eventually combine to buy annuity? Must I include OH in annuity from PR? They are in line to receive a generous FS pension which I can't hope to match... So, in that last comment about WP I was grasping at straws re getting out of buying OH a pension! Silly me...

EdInvestor

waltzer wrote: »

I was trying to find out from provider what my pot would amount to if I began paying in 200pm plus the SP2 opt out money to the current pot but they can't tell me.

This is not the way they normally do projections.

I was naively presuming that they might be able to project what current 20K would grow to over the next 5 or 6 years if I began to contribute spare cash on a monthly basis (plus a few more years of SP2 opt out).

You can easily work this out if you know how much the rebates will be, and if you ignore the tax relief, which otherwise complicates the issue (as the pension is taxed in payment, only 25% of the tfc is usually a net gain anyway.).

Must I include OH in annuity from PR? They are in line to receive a generous FS pension which I can't hope to match... So, in that last comment about WP I was grasping at straws re getting out of buying OH a pension! Silly me...

It is ridiculous, quite agree.But this final distinction from the old days should be dropped in 2012 when they abolish contracting out,hopefully.You can avoid it now by putting the money into drawdown rather than an anuity.

waltzer

Thanks for that. I've already got c 400pm going into another provider's SH and I'm looking at what I can do with this set-up being discussed. At least there's a way of avoiding dual life... I suppose the options are to keep up paying into other pension and either pay into this SP2 opt out pension or set up another stakeholder with a new provider and just let this opt out pension accrue. On the other hand, is one SH largely similar to any other ? ie similar charges similar fund choice?
I'll need to try to find out what the rebates are. Phone pension service?
Thanks again to both DH and EI

isasmurf

Is this what you are looking for?
http://www.hmrc.gov.uk/nic/cosr-comp.htm

waltzer

Thanks isasmurf. How does the table work? ie how does it tell me how much goes into pension?

waltzer

I'll retract that last post. I've worked out roughly how it works. Thanks again to all.