Contracting back in to S2P?

incher

Hi all, looking for a bit of advice please.

I have 3 personal pensions, but have not been paying into any of them for a few years.

One of them is with Prudential, and I get a letter each year suggesting I would be better off contracting back into S2P. The transfer value last April was £16689.

I'm female, 44 and employed.

I can't decide what to do, and a trawl (admittedly quick one) through here and on Google hasn't made things any clearer at all.

I intend to sort out the three pensions by this time next year, but Prudential are stating I have to decide by 31 March 2011 if I want to contract back in (for this year I guess?).

Any ideas/comments would be very much appreciated.

Thanks

JOHNGT

The rebate you get for contracting out these days is stingy compared to the state second pension you give up. You need to get a reasonably high rate of return on your PP fund to match the S2P benefit you have given up. On a purely financial basis therefore probably not worth staying contracted out unless you think you can get a high rate of return (7%+) on your fund.

However, the money is in your own pot and there is no guarantee that the government might not cut the amount of S2P retrospectively. So, how much do you trust future governments??

In any event, contracting out via PP will stop on 5th April 2012 so you won't have the option next year as you will go back into S2P by default.

As you are only one year away from the end of contracting out, your decision is for this year only. In the grand scheme of things, it won't make much difference what you decide to do this year.

Loughton_Monkey

You should spend very little time deciding. No right or wrong answer. You will be forced to contract back in next year anyway.

incher

Ok, thank you very much. I will leave things for now. Financially things will change for me next year anyway, so will look into the whole pension situation then.

Cheers!