Opt out of SERPS/S2P?

shopaholictiedtheknot

Jay-Jay wrote: »

I've just fallen over this thread by accident and it's got me wondering.

I was advised by my employer (IFA), at age 18, to contract out of SERPS. I never really understood the issue so agreed. Now,12 years on I still don't have a private pension plan and I haven't contributed to SERPS either!

Sorry to hijack this thread but something tells me that I need to get my finger out and do something QUICK. Can I contract back in?

I too have just stumbled upon this thread and I am in the same situation - I had a pension plan when I got married in 1990 age 20 and was advised by my pension provider to opt out, which I did and and paid into the pension for around two years until I stopped work when I had my daughter and froze it. I have never been able to afford to start it back up again and I am now 38 and now I am worried - should I opt back in - is this possible? HELP PLEASE!!

dunstonh

With respect, there is enough information on this thread for you to make your mind up. Particulary the last few pages which give more current detail (i would suggest reading backwards on this thread).

If you are not employed then you arent contracted out in reality. Just on paper. It makes no difference as you are not earning and therefore not paying any NI.

shopaholictiedtheknot

I AM employed - full time, I will read back thanks

shopaholictiedtheknot

I can't find anything relevant to my situation am I having a blonde moment?

EdInvestor

shopaholictiedtheknot wrote: »

I had a pension plan when I got married in 1990 age 20 and was advised by my pension provider to opt out, which I did and and paid into the pension for around two years until I stopped work when I had my daughter and froze it. I have never been able to afford to start it back up again and I am now 38 and now I am worried - should I opt back in - is this possible? HELP PLEASE!!

If you are back at work full time and there is no company pension, then probably what has happened is that the old pension has reactivated itself and the NI rebates are being paid into it.

Contact the old pension provider to check and also get the information I've listed about the old pension, as it's probably sensible to move it.

Provider
Current value
Transfer value
Fund(s) it is invested in
Alternative fund options
Annual charges.

giger

After changing jobs 6 months ago I have found myself in a strange situation that I had not thought about; I contracted out of SP2/SERPS around 10 years ago on the principle that I would rather invest the money myself and hopefully out perform the government second/top up pension. Since then I have had some good rebates and good growth on my money. My new employer has a final salary pension and I have been told that these schemes have a mandatory opt-in for SP2 meaning I cannot have my contributions redirected.

I find this very annoying as I had planned to opt out for as much of my working life as possible and build up a nice nest egg with this money. As a 30 year old with a number of working years ahead of me yet, I am wondering how this will affect my pension now I have opted out for 10 years and have now rejoined the scheme. Could there now be any negative effects for me (financially) having rejoined now?

I find it hard to believe that I do not have a choice in SP2/SERPS with a final salary pension :mad:

Paul_Herring

giger wrote: »

Could there now be any negative effects for me (financially) having rejoined now?

Only in that future potential NI rebates won't be going into your older pension fund.

I find it hard to believe that I do not have a choice in SP2/SERPS with a final salary pension :mad:

As I understand it, this is typical for defined benefit (as opposed to defined contribution) schemes (which is what you appear to be saying this new one is.) Typically you'll still be up in the long term (i.e. you'd get more out of the DB scheme than from a DC scheme for the same money.)

giger

The other annoying this is that I cannot make AVCs into my pension now without starting a new stakeholder pension with my new employer (so effectively I have 2 pensions with them). Seems a shame that I cannot re-direct AVCs pre-tax to my old pension that used to receive my SP2 contributions so that I can keep topping it up - or have I missed something?

jamesd

You can presumably make contributions into the pension that your contracted out payments were going into and you'll get basic rate tax reclaimed automatically by the pension provider. For higher rate tax you'd need to tell HMRC about your contributions to get the extra tax rebated directly to you.

You might also compare the costs and investments available to modern personal pensions since they might offer better pricing or flexibility.

karenf_2

Hi
I remember something about SERPS about 10 yrs ago and I remember that I suddenly had a 'pension' with Prudential. I don't physically put anything into it, so am not really sure what it is or what i need to be doing with it....HELP please!