Opt out of SERPS/S2P?

jamesd

It would not. The protection isn't for you. It's protection of the government's right to the contracted out money. That protection for the government includes the requirement to buy an annuity with spousal cover even if you don't have a spouse and anticipate never having one.

The removal of the protection improves the position. Those who want spousal protection can buy it, those who don't are no longer going to be required to.

colshandy

[quote=[Deleted User];49470209]Yes. Why pay 40% in tax when this could be going into your pension?

Only issue would be the salary you pay yourself. Personal contributions are max at salary. However, there is nothing stopping you making contribs from the company.

Another idea, is it a ltd company? If so, change the shareholding percentage so that your mrs gets more dividend than you to even out income a bit....
Perhaps then neither of you will go over the high bracket.[/QUOTE]

Low salary but currently all contributions are from the company.

Good idea about giving mrs more of the dividend.

to be honest all of this is bit immaterial (keeping out of higher tax band) as I have a good few ££ in reserves which I think I am going to take out to may off some of the mortgage and take the tax hit..

Hmm.

roadman

Hi newbie here / I commence serp back in 1990 just got a letter today have been in it for 21 years shocked to say the least ,i have company goverment pension of two years up to now am nearly age 42 any advice would be greatful ,is it worth staying in were i am ,or putting the serp into my goverment pension ,will phone scottish widows on wedesday just looking at my options .

dunstonh

roadman wrote: »

Hi newbie here / I commence serp back in 1990 just got a letter today have been in it for 21 years shocked to say the least ,i have company goverment pension of two years up to now am nearly age 42 any advice would be greatful ,is it worth staying in were i am ,or putting the serp into my goverment pension ,will phone scottish widows on wedesday just looking at my options .

You are going to need to clarify what you are saying as your post is a bit hard to understand.

Are you saying you contracted out of SERPs back in 1990?
Are you also saying that you are a member of a govt backed occupational pension scheme (for the last 2 years)?

If you are in a defined benefit scheme then you are not contracted out with the personal pension. The defined benefit scheme overrides it. Plus, contracting out has finished now. The last chance to opt out/in has gone. As of next year, all contracting out with personal pensions will be abolished.

As for what you should do, Scot Wid will not be able to tell you. It is an advice question and you need to use an adviser. You may or may not be able to transfer it into the occupational scheme (some of the govt backed ones only have a 12 month window at the start of membership). it may or may not be better to move it to a modern personal pension. It is worth reviewing as its an old plan but old doesnt always mean bad. For example, Scot Wid were the last of the providers to offer guaranteed annuity rates. They carried on until 1995. So, there is a remote chance you have those on your plan.

roadman

Policy with scottish widows the contract details are as follows ,i have unit linked personal pension plan to accept SERP/S2P contracting out contributions from the DWP . I started this policy back in 1990 ,last contribution was may 2011 .mMy goverment penison just over 2 years and keep paying in to it weekly :-) so what happens to SERP /S2P that i have been a member of for 21 years ,does it just go towards my old age state pension when i retire .

dunstonh

roadman wrote: »

Policy with scottish widows the contract details are as follows ,i have unit linked personal pension plan to accept SERP/S2P contracting out contributions from the DWP . I started this policy back in 1990 ,last contribution was may 2011 .mMy goverment penison just over 2 years and keep paying in to it weekly :-) so what happens to SERP /S2P that i have been a member of for 21 years ,does it just go towards my old age state pension when i retire .

The SW pension will pay you an income in retirement. It has no impact on the state pension.

patrea

I just got the official projection back from the Pension Service: I'll retire in 2022 and it says I'll get £32 per week as Additional State Pension. I have always been contracted in on a salary of around £35k.
Does £32 pw look correct? It seems very low. How can I check?

Edgar52

I was advised in 1991 to opt out of Serps. Now companies are writing to me telling me this was bad advice and suggesting I make a claim against the company who suggested it (General Portfolio I think). I have had no contact with the insurance company for 15 plus years, so I am not sure if I should take the claim company up on their offer. All feedback greatfully accepted

dunstonh

Now companies are writing to me telling me this was bad advice and suggesting I make a claim against the company who suggested it (General Portfolio I think).

What companies are writing to you? There are only a handful of claims companies that still operate in this field since the FSA found only 1.5% of people who contracted out were potentially mis-sold. With 98.5% being set up correctly, the odds of being mis-sold are tiny. So, most claims companies gave up after that.

Here are a couple of things to be on guard with to see if you are being told correct things or not by the claims company:

1 - Has the claims company supplied you with the FSA flowchart so you can see whether you were mis-sold or not? It is a consumer booklet with a simple flowchart so you can see for yourself. Firms use that flowchart in dealing with complaints. So, if the flow chart shows you were not mis-sold, you dont waste your time

2 - Is the firm charging you upfront? If yes, then avoid like the plague. A number of these £495 up front companies have come and gone taking the £495 with them. They make their money on the £495 and not the payouts on the 1.5% that were potentially mis-sold

3 - Is the firm saying they will do a pension review at the same time? This is certainly one to avoid as they acting unethically and unprofessionally by making out you have grounds to complain and wont charge you but will then tell you that you can get a better pension and take full commission on that pension transfer (typically around 5% of your value). The complaint will fail in line with 1.5%/98.5% but they still make money out of you on the pension transfer which is what they knew all along.

If any of the above apply (sometimes 2 or all 3 apply) then walk away and you have avoided being conned, mislead or being dealt with by an unethical company.

[TEXT DELETED BY FORUM TEAM]

Here is the FSA brochure with the flow chart on page 4-5. http://www.activewealth.co.uk/pdf/fsa/retirement/s2p-wrongly-advised.pdf (not my site but they happen to have the pdf online)

jamesd

patrea, £32 per weeks seems low to me for that income level. Try contacting the Future Pension Centre. Among other things they can tell you your recorded income for every year in which you worked, take notes if you ask for this so you only have to ask once. They should be able to give you some idea of whether £32 per week looks right.

Edgar52, there's a good general rule: financial service companies that contact you directly are scammers of some sort. Even more so when it comes to those contacting about claims of mis-selling.