Opt out of SERPS/S2P?

jamesd

If you want to have two years of contracted out rebates paid into a personal pension and if contracting out is otherwise suitable for you, yes.

mirrorimage0

hi all i dont understand pensions at all, have never had a private one and have havent taken any notice of the state pension .

question is hubby has a pension with royal london and just got the opt out/opt in letter , i handle all the financial stuff and he is asking me what to do, (i have no idea)

also he has just started working for the local council on a casual basis (as and when they need him) should he transfer his pension to the council one or not, i have also worked for the council for the past 5 yrs, have never had a pension am starting to think its about time i got one, im now 31 and hubby is 45.

any advice is appreciated, as i said i generally deal with all the money side of things but have never had a clue about pensions

dunstonh

he has just started working for the local council on a casual basis (as and when they need him) should he transfer his pension to the council one or not

If its better then yes he should. If its worse then no he shouldnt.

i have also worked for the council for the past 5 yrs, have never had a pension am starting to think its about time i got one, im now 31 and hubby is 45.

get in the pension ASAP. You have a damned good pension scheme and you are throwing money away by not being in it.

The basic state pension is £5000 a year. Unless you want to live on that in retirement then you need to be doing something about it.

mirrorimage0

thanks for that dunstohn, we do also have provisions (ie a couple of propertys) for when we retire so will have something set aside for retirement. but will look into the council pensions to see what they offer. x

dunstonh

For every pound you spend on the property and every pound on the LGPS the LGPS would make more.

Lee_Martin_2

The question of opting out of SERPS has been raging this way and that for a long time, and any number of opinions make a good case for the pros and cons. You can ask yourself, 'will the contribution be put to better use in a personal pension, or a state pension?'. In other words, do I trust the private professionals or the government with my money? You should consider independent financial advise before you make a decision, and remember that a pension should only a part of a diversified financial portfolio to spread risk.

hieroglyph

I was advised to opt out of SRPS in 1988 when the then company set up a scheme which we all had to join. It was however portable and I subsequently moved jobs in quick succession and then long period of unemployment. As such I have never added any further contributions to the pension and at current levels will give me £790 per anum on retirement! I did invest elsewhere though and have full control of my assets, so is not an issue. BUT I was tempted to know whether I should have opted back in and fired a mail off to serpsreview.co.uk to see what all this mis-selling is all about. However the paperwork from them is unconvincing, being printed entirely on a poor inkjet printer (including smudged company logo) and a hand written reply envelope. So I decided to come here and see what others are saying. Bottom line though, with around £10k in my pot and aged 52, is there any benefit from changing anything now??

lisyloo

I am 42 and female.
A few years ago I was told that mathemactically I would be better off being contracted IN, but the decision also depends on how much trust you have in the government as the maths relies on a number of assumptions as to what you will get out of SERPS.
I decided to opt out because I would prefer to be in control.

I have no faith in any assumptions, either simply because things will have to change due to the ageing population or because I don't trust the governement.
If they can do a U-turn on tuition fees in the very short term, then they can certainly change their mind long term and besides that the situation will change anyway.

dunstonh

BUT I was tempted to know whether I should have opted back in and fired a mail off to serpsreview.co.uk to see what all this mis-selling is all about.

There is no issues of mis-selling on SERPS. The FSA did a review and only found under 1.5% of all cases as being potentially mis-sold. If you applied todays standards and regulation to sales of contracting out 20 years ago then they would be mis-sold much of the time. However, any complaint looks at rules that were in place at the time. Not rules in place today. The FSA issued a flow chart to help people decide if they were mis-sold and basically as long as you were under age 45 at the time of contracting out then you were not mis-sold.

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You should be contracted in by age 44. However, if you are not employed then it doesnt matter as you are not really contracted out. The providers write to you each year asking if you want to contract in or not so if you dont then its your decision and not one you can complain about unless you sought advice.

pension-newbie

Not sure if this is the right place to ask - I want to transfer my contracted out SERPS pot (I am now contracted back in) to a different pensions provider, but there are some protected rights invovled and I can't judge their value if any. So I guess I need specialist advice - where can I find out what is a reasonable fee (commission or up front) for someone to provide me with advice on whether to transfer out of existing provider and if so to create an investment strategy for the money - which is just under £60000 and ongoing investments of £350 a month.