Opt out of SERPS/S2P?

Candyfloss247

Ive just remembered to look into this.

I need some help with serps. I opted out in 1986 when I was about 17 or 18 yrs old. I didn't really know what I was doing at the time. I was young and talked into it by a lady who came into my workplace.

I have no paperwork or information on what this means to my pension. Who do I contact to get some information on this? And how does this effect me?

Thanks in advance

dunstonh

I opted out in 1986 when I was about 17 or 18 yrs old.

Most likely in 1988 when contracting out via a personal pension first became available.

Who do I contact to get some information on this? And how does this effect me?

Either ask the insurer directly or ask an IFA to review it.

honizz

Candyfloss247 wrote: »

Ive just remembered to look into this.

I need some help with serps. I opted out in 1986 when I was about 17 or 18 yrs old. I didn't really know what I was doing at the time. I was young and talked into it by a lady who came into my workplace.

I have no paperwork or information on what this means to my pension. Who do I contact to get some information on this? And how does this effect me?

Thanks in advance

I have just fished out a number I used in the past it is the national insurance helpline 0845 9150150. They gave me a lot of info about my serps plan. Good luck

Simepac

I am so glad i came here found out more info in ten minutes than I have in 3 weeks! I see a lot of people are in the same boat as me, contracted out at a young age,moved house,totally forgot I had opted out!! ect. Luckily my pension company found me and i received 2 statements once I had confirmed my address. I have personal pension manager contracted out and a personal pension manager both say they are unit linked. The total transfer value of both comes to just over £32,000. My question is (sorry if its already been asked and answered) can i transfer these funds into my current flexible retirement plan which is with a different company, and will I incur any transfer charges as they have quoted me a transfer value which is the same as my total? Thanks for your help

dunstonh

Simepac wrote: »

I am so glad i came here found out more info in ten minutes than I have in 3 weeks! I see a lot of people are in the same boat as me, contracted out at a young age,moved house,totally forgot I had opted out!! ect. Luckily my pension company found me and i received 2 statements once I had confirmed my address. I have personal pension manager contracted out and a personal pension manager both say they are unit linked. The total transfer value of both comes to just over £32,000. My question is (sorry if its already been asked and answered) can i transfer these funds into my current flexible retirement plan which is with a different company, and will I incur any transfer charges as they have quoted me a transfer value which is the same as my total? Thanks for your help

Most pensions can be transferred if you wish.

There may or may not be charges depending on the terms of the existing pension and then terms of the one you wish to transfer it into. A transfer value which is the same as the current value indicates that the transferring scheme would not levy a charge. You need to check with the receiving scheme what they would do.

jamesd

Something between no charge and a couple of hundred Pounds charge from the scheme you're leaving is normal. Less common for there to be a charge from the receiving one and a few receivers will pay you money for transferring into them or reimburse all or some of the transfer out costs.

To be sure you'll need to ask each place.

scaredofdebt

I've read the thread and would like an opinion on my situation.

I contracted out of SERPS in 1989, I paid £30 a month into this pension with Abbey Life and it's currently worth around £30k. I was earning around £13k pa while working for this company, from 1989 to 1994.

A couple of years after that I stopped contributing as my then employer introduced a company scheme that I paid into, that's worth around £3k with London Life (I think it's AMP now).

I left the company and started working for HSBC in 1997 and paid into their scheme, that's now worth around £40k. I earned from £18k to £45k while at HSBC from 1997 to 2011.

I was made redundant last year so haven't been paying into any pension for a year, I contracted back into SERPs a few years ago (I believe around 2008) as the consensus then seemed to be to contract back in when you get to your late 30s. I am now 42 years old.

I'm waiting for a pension review to come back from Wallwood Independent, but would appreciate any comments.

Specifically:

1. Am I entitled to the basic state pension when I retire (I've always paid NI contributions when working)

2. By opting back into SERPS/SP2 does this mean I qualify for that as well and if not how do I? How much is SP2 likely to be worth when I retire, or is that impossible to answer?

3. Stay contracted in or contract back out again?

I am currently self employed and hopefully will earn enough to begin contributing to some kind of pension scheme, but it's early days yet!

Thanks.

dunstonh

A couple of years after that I stopped contributing as my then employer introduced a company scheme that I paid into, that's worth around £3k with London Life (I think it's AMP now).

London Life is being brought under the Phoenix brand (just in the last few weeks). AMP dumped it many years ago.

I was made redundant last year so haven't been paying into any pension for a year, I contracted back into SERPs a few years ago (I believe around 2008) as the consensus then seemed to be to contract back in when you get to your late 30s. I am now 42 years old.

Depending on income level, risk profile and type of investments used, the typical age range for contracting in was 40-45.

1. Am I entitled to the basic state pension when I retire (I've always paid NI contributions when working)

Your personal provision has no impact on the basic state pension. That is based on the years you pay NI.

2. By opting back into SERPS/SP2 does this mean I qualify for that as well and if not how do I? How much is SP2 likely to be worth when I retire, or is that impossible to answer

Contracting into or out S2P (opting out means something different) is no longer an option. Everyone is contracted in with money purchase schemes. Employed people will build up an entitlement from the point they are contracted in but the amount depends on what they earn in those years. SERPS/S2P gets messed around with a lot. Contracted in benefits have been reduced four times retrospectively. Often its best not to consider it in your projections and use what you do get as a buffer or margin of error. In your case, you are self employed. So, you dont get S2P.

3. Stay contracted in or contract back out again?

You get no choice in the matter
1 - you can no longer contract out
2 - you are self employed. So, you dont qualify for S2P.

Because you get lower state pensions as you are self employed, you do need to make greater provision for your retirement.

scaredofdebt

So if I stop being self-employed I would get SP2 then?

I'm paying NI contributions, what happens to those when you're self employed?

Thanks.

dunstonh

scaredofdebt wrote: »

So if I stop being self-employed I would get SP2 then?

I'm paying NI contributions, what happens to those when you're self employed?

Thanks.

If you were employed and paying class 1 NI and had sufficient earnings then you would qualify for S2P in that year.

Self employed pay class 2 & 4 NI which does not build any S2P entitlement.

The self employed generally pay lower tax/NI than the employed. It was believed historically that the business people would prefer to pay less and choose their own provision. Problem is that most self employed do not seem to realise that they get lower pensions (and other benefits) by being self employed.