Pension Help

troubled_buyer

I need help. I have been puzzling over the decision whether to contract back in after being contracted out for approx 15 years.
In the hope of inspiration?? I requested a pensions forcast from the pensions Agency. I received this today and this has just confused me further.
It showed I had no additional state pension allowance when a forcast from a couple of years ago showed that I did.
I rang them to query this and was told that in 2003 the scheme that I was contrated out to was not performing well so the state allocate a top up to the additional pension to compensate for this.
As my scheme is now performing better this has been taken back?
If this is the case that the state top up when schemes are not performing why contract in?
Have I got the facts right or was I talking to somebody who didn't know what they were talking about at the Pensions Agency?
Any advice or pearls of wisdom would be most welcome. I am running out of time to decide whether to remain contrated out or contact back in.
Thanks

CIS

This used to be one of the main calls Pension Forecasting would get at this time of year.
From 2002, State Second Pension took over from SERPS.

Your Additional Pension wouldn't have received a top up , its based on the revaluation rates applied by the government against your earnings, the State Second Pension takes no account of the actual value or performance of your contracted out schemes

If your earnings have increased since the 2003 year, its quite possible that your AP since then has had a negative figure applied for 1 or more tax years, this has the net effect of reducing your State Second Pension.

As to whether its better off Contracting In or Out, you need to speak to a IFA.

troubled_buyer

Thanks for the explanation.
As for asking an IFA, I have asked 2. One via my employer and one off my own back. 1 told me to remain contracted out and the other told me to contract back in!! Not much help!

dunstonh

There is generally no guidance coming to IFAs on whether contracting in or out is best. The problem is that whilst there are some clear cut advantages to both staying in or staying out, many of the decisions are based on opinions.

Personally, unless it's clear cut what should be done, I put the decision with the policyholder after making them aware of the pros and the cons. It really is the best you can do. As some compliance chap said to me recently, as advisors, when it comes to contracting in/out, you are damned if you do and damned if you dont.