contracted out of state second pension

newmee

Thanks....sounds like I don't have to worry about doing anything!?

hms1948

I opt out of the state pension about early 90s due to Maggie Thacher saying it was a good thing. Some years later my bank informed me that It wasn't making enough interest to equal the state pension and advised me to return to the state pension, which I promptly did. I believe I was in serps for 4-6 years.

Now after having a forecast of what my state pension will be in two years time when I retire. I am £22 a week down. Making further enquiries to the Pension and Works I was informed this shortage was due to coming out of state and into serps and my other provider (the bank) will contribute to my pension when I retire. Whether or not it will make up the £22 or I have no idea. Did approach the company who have taken over from the bank and they couldn't give me a forecast.

Surely there is a way of forecasting what I will receive as I have the value (£**.***) of the serps to date and what it made the year before. Also do I have to stay with this company at pension age or can I switch to another company if offered a higher pension . Switching is it a save thing to do or does it have its problems

seven-day-weekend

newmee wrote: »

I'm sorry but I am totally and utterly ignorant of these matters. Could some one explain to me what I should do please? I opted out of serps (I think) when I took out a private pension and two endowment policies when I was 18. Cashed in both endowments and as far as I recall the amount in my pension too. What have I done by opting out...I still don't understand. I pay into a pension scheme at work (L.A) but does it mean I have opted out of getting a state pension?

Sorry, but it is all so confusing to me!!

oops..that returned before I'd finished, hence edit!

You will get the Basic State Pension (plus any additions you may have accrued) plus your LA Pension.

What you have opted out of is the Second State Pension (formerly known as SERPS), but this should be more than made up by your LA Pension.

Same as me.

dunstonh

I opt out of the state pension about early 90s due to Maggie Thacher saying it was a good thing.

And for most people it has been. In 1996, the SIB did a review of contracting out (not opting out as that means something else - and you didnt opt out of the state pension) and found everyone who had contracted out up to that point was financially better off.

Some years later my bank informed me that It wasn't making enough interest to equal the state pension and advised me to return to the state pension, which I promptly did. I believe I was in serps for 4-6 years.

Labour started reducing the rebates in 1997 (stealth tax as most people wouldnt spot that or even know about it). Many tied sales force sold pension proivders decided to bulk contract people back in again to protect their backsides. Not yours.

Whether or not it will make up the £22 or I have no idea. Did approach the company who have taken over from the bank and they couldn't give me a forecast.

They can give your a statement. Indeed, they issue one every year.

Also do I have to stay with this company at pension age or can I switch to another company if offered a higher pension .

You can move it.

Switching is it a save thing to do or does it have its problems

It has things to be aware of but its relatively painless.