opted out - Pension - now disabled?

Helen00

Hi

I opted out in 1987/88. I have about 1500 - 2000 pounds in the serps accounts. I left work when I had my son in 1990 and a daughter in 1992. I then got divorced in 1996. I did return to work in 1998-2000 part-time working 9-3 while children in school and claiming child tax credit. Unfortunately I was then diagnosed with acute Rheumatoid Arthritis that stopped me working and I have not worked since. I have been receiving Income Support and disability allowance since then. Last year, when my daughter reached 16, I was asked to claim Incapacity Benefit, but they said I had not paid enough stamps to receive it but would be now putting a stamp on for me and reverted me back to Income Support.

I was also advised - about 3 years ago - by my bank, Lloyds to take out a private pension for as much as I thought I could afford, I currently pay about 26 pounds a month. I was never sure whether this was good advice or someone trying to make a commission!!!

My date of birth is 01/06/1957.

What will happen when I reach retirement?

What are your thoughts on this?

Regards

Helen

dunstonh

I was also advised - about 3 years ago - by my bank, Lloyds to take out a private pension for as much as I thought I could afford, I currently pay about 26 pounds a month. I was never sure whether this was good advice or someone trying to make a commission!!!

Its unlikely to be a mis-sale but given your level of income it would be unlikely to be best advice. However, you saw a tied sales rep so that isnt a surprise as they are not required to give best advice. Just to sell the most suitable product in their product range.

What will happen when I reach retirement?

Depends on your personal savings/investments, total pensions and other sources of income and your state pensions qualification. Have you requested a state pension forecast?

EdInvestor

First you should get a state pension forecast from https://www.thepensionservice.gov.uk.Note that you will need only 30 years NICs for the full basic pension.

Then you should evaluate the two private pensions you have. If they are likely to be worth under around 17,000 pounds by the time you get to age 60, then you will be able to take them in cash.

It seems very likely you will be eligible for pension credit on retirement. Thus it probably wouldn't be sensible to continue contributing to the Lloyds pension as you would simply be replacing benefit money you would receive anyway.

It may be sensible to amalgamate the two pensions. Is the Lloyds pension with Scottish Widows?Is it a stakeholder or a personal pension?

Helen00

It is a stakeholder and with scottish widows!

I think I will only have about 13-15 years NIC's.

I did ask about putting them all together but he advised me not to, you hope they give you good advice don't you!

I wonder that I may have enough in the pension to put me over the threshold for claiming pension credit by the time I reach 65, of course its hard to speculate what this might be by the time I reach 65.

Your link to the site is not found at the moment, I will try and find one when I have more time.

Any advice appreciated.

jancee_2

In regard to state pension, unless you remarry before your pension age, 65, you may be able to claim a full pension against your ex-husband's record. They can substitute his contribution record for yours up until the date of decree absolute. It does depend, of course, whether he had a good record up to that point! Ring for a forecast and have your divorce details to hand.

seven-day-weekend

What years have you actually worked and when did you have your children?

Helen00

Thanks everyone for your replies.

I had my first child in 1990 and second in 1992. I was working up until having my first child. I had a couple of breaks, due to redundancy and an operation, probably a 2/3 years. Working from 1975.

My ex-husband died in 2003. He opted out and was self-employed, after the divorce his business went bankrupt, 1996. He had 2 pension plans with one with Barclays windsor life, these totalled about 22000 at his death. Although he only owed about 3000 plus interest and his funeral expenses 2700 I was told there was none left for my children after the expenses of the consultancy.

seven-day-weekend

1975 - 1992 = 17 years NI (assuming you were paying Class One and that these were full tax years) Say 15 due to your breaks of employment.

Were you signing on during these breaks? If so NI will have been credited.

During your years of childcare (assuming you were receiving Child Benefit) then you will have been credited with NI. So, if these were full tax years, 1992-1998 = 6 years.

Also as you say you have been credited during your years on Income Support

So that's over 20 years, plus any you may have had from unemployment.

So you may have almost (30 years) enough to claim a state Pension in your own right.

And of course your private pensions.

The best thing to do is to get a State Pension Forecast :

http://www.thepensionservice.gov.uk/state-pension/forecast/home.asp

McKneff

jancee wrote: »

In regard to state pension, unless you remarry before your pension age, 65, you may be able to claim a full pension against your ex-husband's record. They can substitute his contribution record for yours up until the date of decree absolute. It does depend, of course, whether he had a good record up to that point! Ring for a forecast and have your divorce details to hand.

You can only claim 60% against a spouses record not a full pension.

seven-day-weekend

100% if widowed or divorced

McKneff

seven-day-weekend wrote: »

100% if widowed or divorced

My aapologies, i didn't know that.
and thanks for the info.