Opt out of SERPS/S2P?

Linton

Johnn64 wrote: »

My contracted out scheme is/was with scottish widows. Is that paid to me directly from them as a seperate element at retirement age ? I get statements each year indicating the forecast.
I think my confusion comes from the fact that my current LGPS is classed as "contracted out" and this scheme started in 2004. I originally contracted out in 1987

Contracted out with a FS pension is different. The contracted out bit is effectively merged with the pension. This could make things complex after 2017 as the pension scheme would presumably want the contracted-out income replaced either by the employee or employer increasing their contribution if it was to meet its commitments.

If you have a "simple" contracted out pension then you will have a separate pot, in your case with Scottish Widows. When you retire you will be able to convert the pot into an annuity or drawdown like any other Defined Contribution pension.

Johnn64

Linton wrote: »

Contracted out with a FS pension is different. The contracted out bit is effectively merged with the pension. This could make things complex after 2017 as the pension scheme would presumably want the contracted-out income replaced either by the employee or employer increasing their contribution if it was to meet its commitments.

If you have a "simple" contracted out pension then you will have a separate pot, in your case with Scottish Widows. When you retire you will be able to convert the pot into an annuity or drawdown like any other Defined Contribution pension.

Spoke with my LGPS advisor today and they confirmed that at present it is a FS scheme which is contracted out. In 2014 the Government will change that to a career average scheme, but she said that we will still contracted out, which I am a bit dubious about. If this is correct and I remain with my current employer, I will have been contracted out for the whole of my working life, bar 3 years when I first started work (contracted out SERPS 1987-2004. contracted out LGPS 2004 - present) ..... definately a worry with the new flat rate pension proposals with 19 years to retirement age. The advisor said that when I get to retirement age the Government will send LGPS people a Guaranteed Minimum Pension forcast. I assume that this will be more than the £144 flat rate after all the money I am putting into the scheme every month !!!!

dunstonh

Spoke with my LGPS advisor today and they confirmed that at present it is a FS scheme which is contracted out. In 2014 the Government will change that to a career average scheme, but she said that we will still contracted out, which I am a bit dubious about.

The proposals for LGPS were based on current state pension rules. They would not have been amended for the new rules yet. The state pension legislation and contracting out abolition will trump the scheme rules and require change. Logic says they would likely make changes at the same time but logic does not always apply. Especially for pensions.

365days

I wonder if someone could help me. I'm 41, opted out of SERPS at 18 and for one year paid into a private pension (barclays) at about £30 a month. Then stopped as went to uni. From 1994 I have paid into teacher pension (Some years full time others part time) except for 2 years where I paid into a local authority pension.

Does opting out of SERPS mean I won't get a state pension?

Should I be doing anything with the Barclays? I haven't paid in since 1989.

Other people must have more than one 'pot' hanging around?

Paul_Herring

365days wrote: »

Does opting out of SERPS mean I won't get a state pension?

No; you just won't get the full £144. How much less you'll get is not yet clear.

StevenH_2

Many moons ago, around 20 years, I was told by my bank to contract out of SERPS. I completly forgot about this until Friends Provident got in touch with me and said they are acting on my behalf. Since I contracted out of SERPs I have worked full time and paid all taxes NI etc. I now work for a rather large company and have a pension through them. How do I go about releasing the money in my FP account to go into my company pension....if I can!!

jamesd

Ask FP whether it's a personal pension or some other type of pension. Ask if it has a guaranteed annuity rate or any other benefits attached. If it's a personal pension and has no GAR you can transfer it. You can also transfer it if it has a GAR but GAR rates are usually so far above current annunity rates that it is a bad idea.

Your work pension may accept transfers in if it is a group personal pension. Ask.

If all is OK to transfer, then check the costs of holding the investments you want to hold and pick the best place to hold them.

givememoney

Sorry I haven't read through all of this.

However, just give you details of my husband who DID NOT opt out.

He is now retired and his pension is £232 per week which is actually more per week than he was taking home from Tesco which was the last job he was in before retirement. It is going up shortly but cannot find the letter which states the new payment. He does two other smallish pensions.

This is a darn site more than someone else I know who was out of work and let NI lapse a bit and his forecast says he will be getting £80 per week.

westlife2810

Sorry to go off the thread slightly, but does anyone know about being able to relcaim money when you opted out of SERPS. I opted out about 20 years ago, and my pension provider wrote to me a while ago to say I would not automatically be opted back in, but I have been reading on the internet about the possibility of reclaiming?

dunstonh

westlife2810 wrote: »

Sorry to go off the thread slightly, but does anyone know about being able to relcaim money when you opted out of SERPS. I opted out about 20 years ago, and my pension provider wrote to me a while ago to say I would not automatically be opted back in, but I have been reading on the internet about the possibility of reclaiming?

Please check recent threads on the subject. Or even back over this thread.

The companies that do this are largely there to get your pension details to encourage you to transfer to another provider and earn a commission out of you (typically around the 5% mark). That is where they make their money.

The FSA did a review of contracting out and found only 1.5% of people were potentially mis-sold. They issued a flow chart which effectively says that if you were contracted out before 1997 and were under the age of 45 at that time (40 for women) then you were in the optimal age to be contracted out.

The reasons you dont see many claims companies active in this area is the 1.5% chance of mis-sale being too low to make it cost effective for them to do it. The only ones that are active are those with a pensions sales company attached to them to earn their money on that side.