State pension opt out issue

Alsie54

I opted out of the state pension, basically realising now I was pressured into doing so when I was 18 and now at 44 i have been wondering what to do with it.

I was a Paramedic up until 2002 when I retired on ill health grounds. I'm assuming any Ni I have paid have all gone to the prudential.

Got a letter today saying that I will no longer be opted out from Aprl 2012 but I'm concerned than since I have been on incapacity benefit since 2002 I will now no longer have enough credits to get a pension from the government on the new opt back in scheme.

I have contacted Prudential who say they will hold he payments I have made for the past 26 years till I retire. And that I can't have them back

Can these payments be passed back to the government again, and what protection do I have that the money I have paid in for 26 years will be worth anything in 21 years time.

le_loup

No.
None.

...................

sleepless_saver

Do you mean you opted out of the state second pension (SERPS)?

dunstonh

I opted out of the state pension

You mean you contracted out of SERPS. Not the state pension.

basically realising now I was pressured into doing so when I was 18 and now at 44 i have been wondering what to do with it.

Probably a good job you were.

I was a Paramedic up until 2002 when I retired on ill health grounds.

If you were in the NHS pension then you were not contracted out via Prudential for that whole period (NHS pension takes priority). Since 2002 you have not been contracted out either as you havent had pensionable income.

So, you havent been contracted for over a decade.

Got a letter today saying that I will no longer be opted out from Aprl 2012 but I'm concerned than since I have been on incapacity benefit since 2002 I will now no longer have enough credits to get a pension from the government on the new opt back in scheme.

Pru has basically been a bit like a bucket under a tap that is turned off. It was ready to take rebates but they never came. (i.e. tap turned off).

Can these payments be passed back to the government again, and what protection do I have that the money I have paid in for 26 years will be worth anything in 21 years time.

No. They are in your pension with Pru. How you invest going forward and if Pru are still right for you is between you and your adviser.

kidmugsy

Put your mind at rest - get an official estimate of what your State Pension will be when you reach State Pension Age.

zalanx

I m not a qualified adviser, just another prospective pensioner.

Apparently your DOB is 1968 so your State Retirement Age (SRA) is 67, 2035! 23 years, not 21!

Your pension provider (Prudential) is legally required to provide annual statements of the value of your Private Pension and forecasts of your likely income.

The SERPS/S2P opt-out pension is often describied as 'Protected Rights.' The rules have been relaxed and you should now be able to take a 25% cash sum and may not need to take a 3% escalting pension. You can take this pension and/or 25% of the value (tax-free) in cash from age 55 or, if your condition is life-threatening, immediately.

As an example my contracted-out policy with Sottish Equitable (now Aegon) improved by only 1.9% from 1991 to 2010, way below inflation. Last year it gained 13%! The Pru' is a safe investment.

If you think that another Pension Provider could do better you can transfer to another provider but the transfer value may be less than the unit value.

You say that you have paid into your Prudential Pension for 26 years; payments should have ceased when you retired. If you become employed in the future you will be included and pay for the State Second Pension (S2P).

As you are in receipt of disability benefit any income or capital would, most likely, not improve your situation. This pension is a small safeguard against possible future loss of rights.

As others have said, you cannot opt-out of the State Pension - so long as you are receiving benefits you will also have NI credits. 30 full years gets you a full state pension.

As you are aware, the Government are keen to get the disabled into employment. Most jobs attract better pay than that of a Paramedic but without the 'job satisfaction'. Thank you for your sixteen years service, one of your comrades saved my Mum's life. My best wishes for your future.

Alan

sleepless_saver

kidmugsy wrote: »

Put your mind at rest - get an official estimate of what your State Pension will be when you reach State Pension Age.

Unfortunately the Pension Service is not providing state pension forecasts at the moment for people as young as the OP, though statements are available and would probably be some use.

Alsie54

Thank you everyone for you replies