Opt out of SERPS/S2P?

dunstonh

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 ?

The thread title is not really accurate as opting out tends to refer to people who have opted out of an occupational sceheme. It should say contracted out in relation to SERPS and S2P.

However, back on point, your age is at the time you should be looking to contract back in. However, its quite possible your non contributory pension is contracted out and takes priority. Has the paid up personal pension (not frozen) been receiving rebates annually?

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 ?

She is only contracted out on paper and not in reality. Self employed dont get the second state pension so you cant contract out of it. Think of her pension like a bucket under a tap but the tap is turned off. You can remove the bucket or leave it there but it wont make any difference. In two years time contracting out with a personal pension ceases to exist anyway.

trevormillar

Im awaiting details of my pension from my provider so not sure if its getting rebates.
So to clarify my wife dosent need to do anything ? and my non contributary pension my be receiving the rebate or my personal 1 might have been so if they are do I stay opted out or should I opt back in ?
Thanks for your post

dunstonh

So to clarify my wife dosent need to do anything ?

No. Not really. let is just auto contract back in when the rules change.

and my non contributary pension my be receiving the rebate or my personal 1 might have been so if they are do I stay opted out or should I opt back in

Unless you are an experienced investor or a high risk investor, you should really be getting contracted in by age 45. So, at age 44, you are 1 year shy of that and at age 46, you will be forced to contract in anyway. So, its not a big deal if you wait until you are forced. Although its only one form from the insurer to contract you back in if you do want to do it now (assuming you are contracted out).

Sgt_Oddball

Hi,

I'm contributing to a final salary pension (USS) which automatically contracts out. From a previous employment I also have a personal pension; this was a former 'group pension' scheme to which I also contracted out. This is run by Legal and General and my intention is to carry on making small contributions.

I am now receiving letters asking whether I would like to contract back in with the L and G pension. I gather this will happen automatically in 2012?

My question is: is it possible to contract out from more than one pension scheme and if so, how does this affect the second pension?

Cheers,

Oddball

dunstonh

My question is: is it possible to contract out from more than one pension scheme and if so, how does this affect the second pension?

You are only contracted out on paper with L&G. It isnt getting any rebates as the occupational scheme takes priority. If you were leave that employment the rebates would restart (at least until contracting out with a personal pension is abolished).

guitarman001

So anybody who already pays NI which automatically goes to the state pension.... automatically pays into the S2P as well? So I hear the basic state pension is about £95 a week. Is that just the basic state pension? Shouldn't we all be getting more if we're automatically paying for S2P?
And why does it benefit those on lower incomes more?
And does it take extra out of your NI? (I thought that was a constant amount).
And finally - it is for everybody, not just those who want a personal pension plan?

EDIT - I hear a lot about contracting in and out - what does this mean???

Thanks SO SO much!

jem16

guitarman001 wrote: »

So anybody who already pays NI which automatically goes to the state pension.... automatically pays into the S2P as well?

No. Everyone who pays NI pays into the basic state pension. At the moment people have the option of contracting out of the state 2nd pension - those who choose to do so will have their NI rebate paid into another pension fund and will not build up S2P.

So I hear the basic state pension is about £95 a week. Is that just the basic state pension?

Yes it is.

Shouldn't we all be getting more if we're automatically paying for S2P?

We're not all automatically paying for it. Those who don't contract out will have a higher state pension made up of basic state pension and S2P.

And why does it benefit those on lower incomes more?

I beilieve it's worked that way.

And does it take extra out of your NI? (I thought that was a constant amount).

It doesn't take extra. The normal NI pays for both basic and S2P. Those who contract out ( ie.e opt out of S2P) pay less NI.

And finally - it is for everybody, not just those who want a personal pension plan?

Yes.

EDIT - I hear a lot about contracting in and out - what does this mean???

As above - it means opting out of the S2P.

guitarman001

Thankyou, jem16..

So basic state pension is approx. £95 per week.
What would one expect from S2P (on top of this)?

I'm confused - if we're not automatically paying into it - how can we opt out of it? This is what I'm struggling to understand.
If our NI pays for both the state pension and S2P, then we must be paying into it, no? Therefore surely the pension we get from the government must be £95 p/w basic + whatever the S2P is worth...?

And if we contract out, we get an NI rebate.

jem16

guitarman001 wrote: »

What would one expect from S2P (on top of this)?

Anything up to the same amount as basic state pension (although that amount is not normal)

I'm confused - if we're not automatically paying into it - how can we opt out of it? This is what I'm struggling to understand.

Unless you opt out then you are automatically paying it. However not everyone is paying it. Some occupational pensions are contracted out so if you have one of those then you are automatically contracted out.

If our NI pays for both the state pension and S2P, then we must be paying into it, no? Therefore surely the pension we get from the government must be £95 p/w basic + whatever the S2P is worth...?

Yes unless you have contracted out or are part of an occupational scheme which is contracted out.

D1zzy

I am just about to get my state pension (March) - and have the full NI contributions.
Can't remember the exact figures on my forecast (and am too idle to go and fish it out) but the basic pension was £95ish per week and the SERPS and Graduated elements lift it to £122 ish per week