Need Advice: Head been in the sand about Pensions..42 now and need to sort it out!

gazjam

Hi, thanks for any replies.

Some background:

---

I'm 42 and currently unemployed short term.
I'm concerned about my Pension as my career history has been sporadic and I'm confused about what to do next..
I'm looking for a general sense of where to go next as well as specific help regarding a letter I received from an old private Pension Plan I haven't paid into for years titled "Did you know you are currently contracted out of the Second State Pension?
Now I'm officially confused, and need some advice to help me take action and plan ahead...

thanks.

---

I last worked and payed in NI contributions 2001-2006, whereafter I went to Uni full time to retrain.
I graduated May 2010 and haven't been able to find work so far.

About 20 years ago I set up a pension plan with the Prudential where I was paying a small amount in each month from my Salary.
When I was made redundant from that Job the pension just sat in the background, without any payments going in each month.
After a short period of Unemployment I found work again, but couldn't afford to pay in to the pension so again, it sat in the background.
My old private Pension plan isn't worth very much, so I'm thinking I should transfer it over to my State Pension plan....but Im clueless how to go about it to be honest.
So I need to reconcile them both somehow and begin planning ahead.

Some figures from my Prudential statement (not a lot as I said)

---

My Prudential Plan Transfer Value
Inc. any Protected Rights on 20/12/10: £12,094.63

Forecast of estimated yearly Pension on retirement
Excluding protected rights as at 1/6/2034: £138.00

Forecast of estimated yearly Pension on retirement
Including protected rights as at 10/2/2034: £857

*I have 17 years worth of contributions*

So..Questions?

I'm genuinely worried and confused about what to do next...I'm trying to get a grip on the situation but unsure of my next steps.

#1
Should I "opt back in" to the State Second Pension?
I need to reply back by March 31st.

#2
The "Second State Pension" is in addition to the basic pension, is that right?

#2
I SERIOUSLY need to read up on this stuff so I can act NOW to sort it.
I'm just trying to get a feel for what I need to do next.
Does anyone have some FAQ type links I could go read up on.

Thanks for any help.

IainMacca_2

Your situation is scarily identical to mine, even down to a pension plan set up around 20-years ago which lapsed.

I was just about to post a similar thread - so I'll watch this with interest.

I'm worried that I will end up with a very modest private pension that will exclude me from state benefits.

trotter09

I don't know the answer to your questions but I suspect nobody else does either in the light of the changes to pensions that Ian Duncan-Smith is proposing.

dunstonh

Should I "opt back in" to the State Second Pension?
I need to reply back by March 31st.

You are not employed so it makes no difference as its based on your NI contributions on your employed income.

The "Second State Pension" is in addition to the basic pension, is that right?

yes

gazjam

dunstonh wrote: »

You are not employed so it makes no difference as its based on your NI contributions on your employed income.

Hi, thanks for that.

Should I not do anything then regarding this letter I received from the Pru?

Is the old Pension Plan I took out with the Prudential in any way relevant or applicable to this Second State Pension the letter describes?

My worry is that my old Pru pension (with he money I paid into it) will be sitting there doing nothing and might be better used transferred elsewhere into my State Pension somehow.

Is this possible?

As I said in my original post, I'm just trying to get a handle on things, as I need some advice on what to do next.

i.e. what would someone with more knowledge that myself advise that I should do.
As I said, any pointers to a Pension "primer" or FAQ onlilne somewhere would be extremely helpful, not to mention reassuring.


many thanks.

dunstonh

Should I not do anything then regarding this letter I received from the Pru?

You can choose to do nothing. In 2012 you will be automatically contracted in anyway. This year it will just be like a bucket under a tap with the tap turned off. That is unless you go back into employment. It isnt much of a deal though as the male age to contract in is 45. So, you are under it. Plus, the difference between in and out for just 1 year is only really pence.

Is the old Pension Plan I took out with the Prudential in any way relevant or applicable to this Second State Pension the letter describes?

The protected rights part is from contracted out money.

My worry is that my old Pru pension (with he money I paid into it) will be sitting there doing nothing and might be better used transferred elsewhere into my State Pension somehow.

It isnt sitting there doing nothing. It is invested and is subject to investment returns. You cannot transfer it back into the state second pension. You probably wouldnt want to either.

gazjam

Thanks Dunston, feels like I have a better handle on the situation now.