Opt out of SERPS/S2P?

planteria

interesting james.

i think i contracted out when i had an Allied Dunbar pension via an old employer, but i can't find any record of having done so. what is the best way to find out?

jamesd

if you phone the HMRC Contracted Out Pensions Helpline they will be able to tell you year by year whether you were contracted out and which pension scheme was getting the contracted out money.

The National Insurance Helpline they reference can tell you for each year of your life whether that year counted for the Basic State Pension and how much you earned each year.

The Future Pension Centre has information about state pension statements and related issues.

The free Pension Tracing Service can help to track down old pensions.

For both, be sure that you have note taking facilities so they only have to go through the information once.

gingerpo

I also opted out in the 80s and i've seen a couple of posts saying that when SP2 finished in 2012, everyone who had previously contracted out has automatically been contracted back in. is my understanding correct? i can't actually find this information anywhere on the internet except this forum & i've been searching for 2 days!

gingerpo

In addition to my earlier post, I need to get some pension advice but when I look into IFAs they all want you to have at least 50,000 in savings before they'll talk to you! So, I wonder if anyone here has any advice for me.

I'm 45. I've been living and working abroad (in non EU/EC) countries for more than 15 years. I have paid NI contributions for about 12 years but I opted out into a personal pension in the 80s. I have not made contributions to that pension because my salary in developing countries never stretches that far. So I think its transfer value is less than 1,000pounds. I hope to stay abroad into my retirement but might end up in an EU country so it may be possible to claim what little state pension i have (pension calculator says 44 pounds at the moment!). If i stay in a non EU country I don't think i'll be able to claim the state pension.

I currently have about 15,000 pounds in ISAs and savings. best interests rates i can find for continuing in this vain are 2-3% - rubbish!

So, i'm wondering if it's worth putting a lump sum of say 6,000 pounds into the private pension scheme that i mentioned earlier rather than trying to get 2 or 3% on savings plans? I wont be able to contribute to the pension again for another 2 years but then i'm hoping to get a 'money' job for a couple of years and save say 10,000 to put into the pension.

i haven't yet spoken to the pension company to work out how much i would need to give them in order to get a viable amount when i retire and obviously that information will be helpful. in the meantime, does anyone have any ideas?

i also want to have my own business at some point but i will never have a lot of money. my jobs will almost always be low paid.

jamesd

gingerpo, S2P has not finished. Those who are working in the UK as PAYE employees continue to have S2P payments that increase the amount of Additional State Pension that they will get on top of the Basic State Pension under current rules.

Yes, anyone who was still contracted out into a personal pension in April 2012 has contracting out ended. Those contracted out into a workplace defined benefit pension are still contracted out if their pension scheme is.

Because you were not working in the UK you would not have accumulated S2P for those years abroad, nor did you accumulate much rebate money in the personal pension.

If you are not a UK resident you are not eligible to make payments into an ISA or into a UK personal pension. The tax advantaged investing options available to you will depend on the law of your country of residence.

Under the proposed new flat rate pension for the UK it appears that you would qualify for 12/35ths of £144 a week.

For investments in general, including personal pensions and stocks and shares ISAs you can expect to be able to take between 4% and 6% of the capital value as income. Roughly, multiply your desired income by 20 to work out how much you must accumulate to get it.

dunstonh

planteria wrote: »

interesting james.

i think i contracted out when i had an Allied Dunbar pension via an old employer, but i can't find any record of having done so. what is the best way to find out?

Contact Zurich and supply them your name, date of birth, NI number and past address as well as current. Dunbar was bought by Zurich and rebranded under Zurich.

planteria

thanks james, and dunston.

this is an interesting thread, with some great replies to various questions.

is it actually better to have been contracted out for a while, if you will earn enough credits to qualify for full state pension regardless?

jem16

planteria wrote: »

is it actually better to have been contracted out for a while, if you will earn enough credits to qualify for full state pension regardless?

That depends on your situation.

30 years will give you a full basic state pension from now and from 2016 onwards a full flat-rate state with 35 years. However if you have been contracted out you will lose some of that flat-rate pension unless you still have the ability to make extra contributions above the 35 years. Some will be able to do this and some will not.

jamesd

Yes, if you will be able to pay in for 35 years and will be under the new system and will start out with less than £144 a week base amount, it will be better to have been contracted out, because you will be able to both get the benefit of the contracted out pot and accumulate more years above 35 to get to £144 a week.

Under the current system there is no corresponding benefit for being contracted out, you simply lose state pension for each year contracted out, not being able to double dip.

Public sector workers are probably the largest population of employees who will be able to benefit from this, just as they are also probably the largest population able to benefit from flexible drawdown. Others with defined benefit pensions have the same benefit, but these days for new employees such pensions are largely limited to only the public sector, with very few exceptions.

gingerpo

'gingerpo, S2P has not finished.'

thanks James, i've investigated further and i see that you're right. Wikipedia says '[FONT=&quot]S2P was ceased in April 2012 and is no longer available.[/FONT]' So that'll teach me not to trust everything i read! that's one thing cleared up.

'For investments in general, including personal pensions and stocks and shares ISAs you can expect to be able to take between 4% and 6% of the capital value as income. Roughly, multiply your desired income by 20 to work out how much you must accumulate to get it.'

the difficulty i have with this estimating how much income i'll need in 20 years! i don't really understand how you work out this maths but i'll take your word for it .

thanks again James