Opt out of SERPS/S2P?

MS_Dolphin

Thanks James,

That's a good thought.

I'm considering HL for a SIPP, so it could end up there anyway - I've not finished my research yet and I don't want to rush the decision. I'm looking at property purchase and overseas property purchase, so not sure HL will meet my wider needs.

In the meantime I want to get the contracting out done with a view to transferring when I get the SIPP set up.

Thanks again.

jamesd

HL doesn't do direct commercial property ownership. No SIPP is permitted to have any residential property so that might cramp your plans.

If it's for letting I think there's been some recent decision that makes it clear that it is not acceptable as commercial, but I'm not sure of this, not an area of direct interest for me, so I might be wrong.

MS_Dolphin

I'm looking at commercial property and specifically overseas.
I'm pretty good with SIPP's but not this area which is why I'm moving slowly with it.

I've been told about an option that sounds too good to be true - and the old adage, if it looks too good.....

The 10 second (ok, few minutes) version is:

An individual sets up a ltd company. The SIPP then purchases shares in the ltd company. The company then buys the property.
The benefits of this are that the property is not held within the SIPP and therefore, the usual restrictions don't apply and there is much more flexibility.

Certain SIPPs can by shares in unlisted ltd companies I know, but this option just looks too simple.

For example, what's to stop me setting up a ltd company - can do it for £30 on line in minutes. The company issues shares, the SIPP buys them.
I then become an employee of the company and pay myself a salary from the funds received by selling the shares to the SIPP.

I've then succeeded in accessing most of my pension fund, years early and largely in cash. It seems far too easy.
I've been assured its possible, so I'm going to look more closely at it, but have to say I'm yet to be convinced.

Apologies for this drifting away from contracting out, but I'd be interested in opinions.



Editing instead of another post - because I agree, it isn't the right place.

I'm looking to meet the guy 'selling' the scheme in a couple of weeks. If there's anything in it - good, bad or ugly - I'll start a thread and give the details (but not the name) and let people share their views. As I say, I remain sceptical, but I'll keep an open mind.

jamesd

That reads like a "come and get me for deliberately breaking the rules and trying to hide it" scheme. Ask HMRC is what I suggest if there's even a hint that it might be a ski chalet or some other form of residential property.

Better to use a new topic if you'd like to discuss this more. It's interesting but the wrong place, as you say.

Shaunyg

If anyone can help it will be appreciated. I opted out of SERPS in the late eighties, and now have no idea whats happened to it. Can't remember the name of the pensions company, but I don't think they exist anymore. Moved house a few times since, and can't find any paperwork. Any advice ?
Thanks

MattS

Shaunyg wrote: »

If anyone can help it will be appreciated. I opted out of SERPS in the late eighties, and now have no idea whats happened to it. Can't remember the name of the pensions company, but I don't think they exist anymore. Moved house a few times since, and can't find any paperwork. Any advice ?
Thanks

(please note, I'm not an IFA)

Opting out of SERPS means that you were liable to pay less NI each year, but as a result you won't get an extra earnings related pension added to your state pension when you retire. It doesn't have to be part of a pension scheme, but often is (with the reduction in NI being used to help fund the pension).

If you think that you have a pension but don't have any details on who it's with, you can try to use the Pension Tracing Service: (apparently I can't post links, but google Pension Tracing Service.)

The only other option would be to call around the insurers and pensions companies and ask if they have any benefits in your name, but that's not all that likely to succeed.

One thing to bear in mind is that pension schemes often run traces for members with no address. As long as you've not changed your name, there's a good chance that they'll find you when you get nearer to the point that you should be taking your pension.

gizz_mo

Thanks Jamesd. You have definitely helped to clear things up in my head. I checked my contracted out statements, and you are correct, the amount paid in has stayed static since I started my job.

Interestingly, the value from the annual statement I just got is 25% less than it was a year ago, even though the amy paid in has remained static. Scary that in one year it has lost 25% if its value....

jamesd

It probably lost more like 45% of it's value at some point over the last couple of years. Markets are up quite a bit since the low point for many at the start of March last year. It's just the normal ups and downs but it illustrates why you need to consider adjusting the investment mixture as you get within the last five or so years of retiring. It'd be bad to buy an annuity during the time when a market is down by 45%. That's avoidable with both advance planning and temporary steps like using income drawdown for a while if the timing happens to be bad.

If you find out what the unit names are you can get valuations whenever you like by looking them up on the web. Annual valuations aren't necessarily current values.

Moniker

Sorry if this has been asked before, but I an unclear as to whether I am in or out of SERPS. I took the government incentive in the 80s to opt out of SERPS and opened a pension with the Abbey National into which the government paid the incentive (which was about £1200 I think). I couldn't afford any pension payments at the time (I was working part-time as a teacher and did not contribute to my employer's scheme or into the Abbey pension). I did subsequently restart payments into my employer's scheme. Later I persuaded them to let me transfer the Abbey pension into my teacher's pension. However, I have no idea if I am opted in or out of SERPS. I left teaching more than 10 years ago but will qualify for a small pension in about 3 years. In the last 10 years I have contributed to a pension under the local government scheme (I work for a university). I have tried to get a pension estimate from the DWP online but the registration doesn't seem to work - so any advice welcome!

Moniker

seancass

Greetings! I hope you don't mind me saying that I have been following your advice with interest and wonder if I might ask you for your advice on a couple of issues please?

1. I believe I am currently opted out of SERPS. I am 56 years of age and a teacher but not a member of the teachers' pension scheme. I left teaching for a few years and was self-employed but now back at an independent school and paying NI contributions. I have private pension fund monies lying with AJ Bell (Sippdealxtra) some of which is protected rights monies (about 30K). The question is this: I am already taking a drawdown from the non-protected rights element but if I opt to take the tax free lump sum and drawdown from the protected rights element now (I have plans for the few thousand it will generate) will I still be able to do so if I opt back into serps immediately? Does the state have any claim on my protected rights money with Sippdeals if I opt back into serps?

2. Although I have been paying NI contributions for the past 3 years since re-entering teaching I understand that Sippdeal cannot accept NI rebates so I wonder where that money will have gone and wonder if I might be able to claim it back. Perhaps I can open a new stakeholder pension scheme to accept them. But, perhaps it would be better to go back into SERPS?

Any advice would be most gratefully received. Please feel from to email me.

Thanks.

Seancass