Opt out of SERPS/S2P?

linnyp

Hello!
About 10 years ago I opted out of SERPS for an occupational pension, shortly afterwards was made redundant and then spent a few years raising my children. I've worked part time for the last three years, paying nothing into a personal pension, and have just started part time work with a council and paying in to a local government pension.
Would I be right in thinking I am still 'opted out', and that I would probably be better opting back in as my private pension is only worth a couple of hundred quid and I am 34?
If so, how do I go about opting back in? I followed a link to the pension service but wasn't sure who I needed to talk to. Really would appreciate any help.

dunstonh

If so, how do I go about opting back in?

You are only contracted out on paper as for as the personal pension is concerned. It wont be getting any rebates as the Local Govt scheme is contracted out. So, you may as well contract back in to save paperwork.

Ask your pension provider for the forms to contact back in.

EdInvestor

linnyp wrote: »

Would I be right in thinking I am still 'opted out'

Yes, but you will now be opted out into your local Govt pension, which takes priority over your personal pension.This will remain the case as long as you work there and you need do nothing.Final salary pensions like yours are not affected by the abolition of opting out in 2012.

dunstonh

thingking wrote: »

Bad idea to opt out

apart from when its a good idea.

HanSpan

dunstonh wrote: »

You are only contracted out on paper as for as the personal pension is concerned. It wont be getting any rebates as the Local Govt scheme is contracted out. So, you may as well contract back in to save paperwork.

Ask your pension provider for the forms to contact back in.

Interesting. I didn't realise there would be any difference in terms of paperwork. I have a similar situation in that I worked in a private company for a few years back in the 80s and was persuaded to contract out. I've then worked for a public organisation with a final salary scheme for about 18 years.
Every year I get a rather confusing (and probably pointless) annual report from a company called Merchant investors that shows a value of £1,641.63 as at January this year! If I wrote to them and contracted back in on paper what would actually happen to that money? Would it still just sit there doing pretty much nothing and would I still get an annual statement that's probably costing more in postage than its worth?

I realise with hindsight some of the stuff I was sent when I first joined THIS job probably meant I could have used that MI pension to buy a bit extra in my current pension, but I'm pretty sure there was a one year limit so I'm rather past it

EdInvestor

HanSpan wrote: »

Every year I get a rather confusing (and probably pointless) annual report from a company called Merchant investors that shows a value of £1,641.63 as at January this year! If I wrote to them and contracted back in on paper what would actually happen to that money? Would it still just sit there doing pretty much nothing and would I still get an annual statement that's probably costing more in postage than its worth?

Yes.

I realise with hindsight some of the stuff I was sent when I first joined THIS job probably meant I could have used that MI pension to buy a bit extra in my current pension, but I'm pretty sure there was a one year limit so I'm rather past it

That's right.But you can still investigate how much you are paying in charges, how your money is invested and any other options and transfer it to an alternative provider where it could do better in future.

HanSpan

EdInvestor wrote: »

Yes.



That's right.But you can still investigate how much you are paying in charges, how your money is invested and any other options and transfer it to an alternative provider where it could do better in future.

Quoting seems to have done something very wierd and lost my original bits!
Thanks for that. I'm not sure the effort is worth it for less than £2k though.

D1zzy

webmister22 wrote: »

I am a 25 year old guys and I've just decided its time to start a pension. A friend has mentioned that they have opted out of SERPS/S2P. Does anybody know how this works and whether it is a good idea for someone my age?

Thanks in advance.

When I was your age (sorry) the last thing I wanted to think about was pensions - and if I'd had the option to opt out of anything I would have ( money in the pocket and all that). Now as approach my pension (next year), even though I have plenty of savings, the idea of having such a reduced income is pretty scary. I have just repaid £8000 into an ex company scheme to replace the £1200 I withdrew in 1975 (bought carpets with the £1200) -that makes a significant difference to my company scheme payout. The SERPS/SEPS2 contributions add about £25 a week to my state pension - but who knows what will happen to state pensions in the future.

KiNeL

Hi all,

I opted out of SERPS back in the late 80's and have remained out since despite regular letters from my provider, Legal & General, asking/advising me to contract back in. To stay out was a conscious decision based on several factors paramount amongst which were:

A. Not trusting governments

B. The probability that I would be retiring before 65

so no gripes or regrets on that score.

Now approaching 60 I am hoping, and planning, to retire in the next year or so in preparation for which I have already moved abroad (France) and am in the process of transferring both my company defined contributions pension and my contracted out SERPS, a total approaching £200k, into an Isle of Man based QROPS (Qualifying Recognised Overseas Pension Scheme). Essentially this is a SIPP from which I can take the customary 25% tax free lump sum and 120% drawdown but with the added advantages (for me) that not only does it convert the money into € but also places it under my control in so much as it's mine to invest as I choose, when I die it becomes my wife's, and when she dies it forms part of our estate, all very neat and proper and an infinitely better deal than any rotten festering corpse of a UK annuity. I digress however.

My question is this. I will still be working after the SERPS has been transferred and the L&G policy cancelled so what happens to the S2P element of my ongoing NI contributions, do I start off with a new £0 S2P account ?

I cannot easily take out another contracted out policy because although I will still be working in UK as a PAYE employee I am no longer UK resident and as such most doors are closed to me, not that I particularly want to invest in a sinking ship anyway but thats a different topic altogether!

We're obviously not talking major bucks here, only whatever may accrue over the course of a year or two at most, but it's my money all the same so I want to see something in return for it, even if it's only enough for my daily baguette

trevormillar

Ok years ago I took out a personal pension but a few years later I got a job with a pension I contributed to and my personal pension was frozen.I opted out I left this job didnt restart my personal pension.
I am in a new job with a non contributary pension should I opt back in or not as I dont have a clue im 44 now ?

My wife didnt take out a personal pension but opted out she is a low earner being self employed and pays NI yearly should she opt back in or not ?

We are both useless with finances