scot/wids abbey serps refund help

stuey123

:eek:hi guys long time no post but,was a site review serps.co.uk where they say they can reclaim money back when i spoke to them they told me as i have moved my pension now to a sipp i cant claim, but told me to write to scot/wids as my age and date when took pension out and told to opt out of serps seems i may have a claim,as a mis sold or didnt explain risks i was badly advised,so just thought anyone else gone down this root or is there a standard letter or templete i can send many thanks ..................:j

dunstonh

These SERPS reclaiming sites were a big con. Most of the companies that did it have been shut down by the MoJ or have folded.

The FSA did a review of contracting out and found a maximum potential failure rate of just 1.5%. A tiny proportion of those that contracted out. It published a flow chart to help you decide it you were mis-sold or not. Basically, the flow chart shows you were not mis-sold if you were under the age of 40 (slightly older for men) at the time of contracting out.

Complaints handlers for advisers are using that FSA guide and you would expect the FOS to do the same as they typically follow what rulings the FSA have given.

Unlike many other areas, contracting in or out is not risk vs no risk. Its a change of risks. Back in 1996, the SIB did a review of contracting out and found that everyone that had contracted out to that point was financially better off. That fell back during the stockmarket crashes and swings between most being better off when markets are high and worse off when market are low. After 1997, Labour reduced the rebates on contracting out and made it less attractive and harder for it to be better financially. In 2006, pension rules changed and allowed those contracting out to get 25% tax free cash from the pension but not those contracting in. Plus, you could take the contracted out pension from age 55 and not have to wait until state pension age with contracted in. So, contracting out became more favourable to some again. Plus, the rebates for the last few years have improved.

Generally, there is no market for complaints on contracting out unless you were above 40 at the point of contracting out. Even then its no guarantee as your earnings level and the rebate in that first year may have been enough to see the break even point be in your 50s (as was common in the early 90s).

LongTermLurker

For many people contracting out, IMO, remains favourable. Even though I'm over the age where it's recommended you consider contracting in, I am single, so can pass on the benefits if I die before retiring and I have the money now - who knows if the benefits will remain when I retire? As dunstonh says, I can even have 25% of it tax free if I want.

I won't be happy when contracting out is banned in 2012 - it will make the benefits of S2P less certain. I'd rather take my chance investing it, knowing a) I already have the money and b) I can pass it on to a non-spouse.