Opt out of SERPS/S2P?

propertyhelpturkey

dunstonh
Firstly thanks for replying.I wonder if you could assist me further.

Maybe i confused you,i will stop working at 51 so their will be no more contributions betweem me being 51-55.

I will attempt to draw on it when im 55 .

Do you know if the Abbey are performing well.

Is a 30K pot good after 18 years?

What are the contributions in relation to the basic state pension?

Thanks in advance.

dunstonh

Maybe i confused you,i will stop working at 51 so their will be no more contributions betweem me being 51-55.

I assume that you have contracted back in as the pivotal age to do so is around 43. In doing so, there will be no more rebates added to the pension from now but it will still be subject to investment returns until you take it at age 55. Investment returns dont stop just because contributions stop.

Is a 30K pot good after 18 years?

If that is the protected rights pot (from contracting out) then its not bad at all.

What are the contributions in relation to the basic state pension?

The basic state pension is £4500 a year so you would need a pot of £100k in a personal pension to get the same sort of benefits.

Remember though that contracting out of Serps/S2P doesnt impact on the basic state pension. You are only contracting out of SERPS and S2P.

Does your pension pot include personal contributions or just contracted out funds?

propertyhelpturkey

No i am still contracted out and plan to stay out, do you think its performing ok ,£30K after 18 years .

Its just contracted out funds ,no personal contributions.

Im not with you with the 100K ,how do you work out how much a 100k pot would give you.

jamesd

The past is over.

Rather than asking if it's performed OK in the past, how about saying more about which exact pension product it's in, where it's currently invested (which funds inside the pension) so it's possible to review whether those look like good choices? After 18 years the odds are that it is not competitive with modern pensions and modern ranges of investment choices.

You could assume 5-6% of the pension value as income if drawing down from investments. 4.5% perhaps allowing for some safety margin and the possible purchase of an annuity instead of staying invested.

propertyhelpturkey

James
All i know is its a Abbey Pension managed series 3 .
Does this help ?

dunstonh

Im not with you with the 100K ,how do you work out how much a 100k pot would give you.

£100k pension pot would pay about the same as the basic state pension at 65. It is worked out by using annuity rates to provide like for like.

No i am still contracted out and plan to stay out, do you think its performing ok ,£30K after 18 years .

You need to be aware that the rebates are capped after age 43 so you are fine until then or maybe a few years after if you have a decent investment strategy and feel the risk is worth it. However, it gets much harder for investments to give the required returns after age 43 due to shorter timescale and smaller rebate.

As for performance, we dont know what rebates you have been paid as they are dependent on the amount of NI that has been paid.

All i know is its a Abbey Pension managed series 3 .

Basic fund and average balanced managed performance. Probably high charges as well compared to modern plans. Not the sort of investment you want to be in if you intend to remain contracted out past age 43.

propertyhelpturkey

Thanks for this advice .
I am currently 44 years of age so the capping effects me .

Ive always been with abbey so have never compared management fees etc.

I dont think it shows me on my annual statement.

As regards the the rebate the last one was around £1000

Other fund possibilities with cheaper management fees i would consider.

Any views ?

Also how would i change fund operators .

simmodave

3 years ago my DB Pension cost me nothing. It now costs me 5% of my salary and, from the 1 Jun 08 will cost me 10% of my salary. Also, the age from which I can take the DB Pension has been increased from 60 to 65. Therefore, not only do they want double the money from me but they also want it for an extra 5 years (and I will lose out on the pension I would have received between 60 - 65 of approximately £33,000). I will be 55 next year and am considering deferring the DB Pension (taking it at 60) and contracting back into S2P. Is it worthwhile contracting back into S2P for 10 years and, more importantly, how much is it going to cost me each month (I lose the rebate that currently gets paid into my DB Pension but just how much is it worth?). Am I cutting off my nose to spite my face? Any views/comments! :beer:

dunstonh

Is it worthwhile contracting back into S2P

You are not contracted out in the same sense as this thread discusses.

Contracting out with a final salary scheme is different to contracting out with a personal pension. The only way you will be able to contract back in is to leave the occ scheme which isnt a good idea.

simmodave

I apologie most sincerely if I have posted on the wrong thread - it was not my intention. The DB Pension appears to be getting expensive (from paying nothing to now having to pay 10%) and with no guarantee that they will not come back for more! The DB Pension pre 1 Jun 08 would have been paid at 60. The post 1 Jun 08 DB Pension is not paid until 65. If I still want to take the pension at 60 (and I do), then the post 1 Jun 08 part of it will be reduced (the pre 1 Jun 08 part of the pension is guaranteed). I only have 5 years until I reach 60 and because the pension will be reduced, the actually increase over that 5 years does not warrant paying the 10% from my salary. I believe that I would be better of saving the 10% in an ISA and opting back into S2P. Am I missing something?