Help! I am confused S2P

nottingham13

If I am part of an occupational pension and earn say £10,000, therefore I am contracted out. According to the Which pension handbook, I will get a £20.41 S2P (2006/7 prices) even if I am contracted out? (and if i only earned £5000 it would be £61.22). Its dependent on the low earning threshold of £12500 in 2006/7.

Is this right?

I have tried the pension people and to be honest they can't seem to grasp what I am on about.

Thanks

jancee_2

Why do you say that 'therefore I am contracted out'? Contracting out is not dictated by the amount.

However, since 2002 S2P has been accruing even if contracted out. This is to help low or moderate earners.
'Up to April 2002, SERPS was based on your record of National Insurance contributions and your level of earnings as an employee.
On 6 April 2002, the State Second Pension reformed SERPS to provide a more generous additional State Pension for low and moderate earners, and to extend access to include certain carers and people with long-term illness or disability. (Any SERPS entitlement already built up is protected both for those who have already retired and for those who have not yet reached State Pension age.)
The State Second Pension gives employees earning up to £31,100 (in 2008/09) a better pension than SERPS, whether or not they are contracted out into a private pension, with most help going to those on the lowest earnings (up to around £13,500 in 2008/09).'
http://www.thepensionservice.gov.uk/state-pension/additional/home.asp