Serps

johnty42

I have recently seen some info re contracting out of serps has been cancelled and now i have been automatically opted back in how has this happened without my permission
i have also seen some talk of compensation for the bad advise given when i opted out in 1980's where can i get advise on this

dunstonh

i have also seen some talk of compensation for the bad advise given when i opted out in 1980's where can i get advise on this

There was an investigation by the FSA some years ago into contracting out. Some claims companies thought it would be the next thing after endowments for them to make money on. However, the FSA found a failure rate of just 1.5% potentially. It published a flow chart and guide and the complaints about mis-selling never took off other than a handful of dodgy claims companies putting in try-it-on complaints whilst they transferred the pension making around 5% commission in the process, often doing the very same thing they complained about. With any scattergun style complaint, some will stick but the majority will fail. They make their money on the pension transfer and the odd case that gets lucky.

The enhancements given to contracted out benefits in 2006 improved things and the reclassification of protected rights to non-protected rights in April this year was the icing on the cake.

Basically, the FSA flowchart says that if you were aged over 45 at the time of contracting out you may have been mis-sold. If not, then you were not.

http://webarchive.nationalarchives.gov.uk/20100210151716/moneymadeclear.fsa.gov.uk/pdfs/s2p_wrongly_advised_ink.pdf

johnty42

Thanks for that i was only 26 when i opted out so it would appear this was the best thing for me i will read through the info supplied

Thanks Again

John

GhIFA

johnty42 wrote: »

I have recently seen some info re contracting out of serps has been cancelled and now i have been automatically opted back in how has this happened without my permission
i have also seen some talk of compensation for the bad advise given when i opted out in 1980's where can i get advise on this

Contracting out via Personal Pensions was abolished by legislation that came into effect in April of this year. Anyody that was contracted out in this way was automatically contracted back in.

jamesd

While contracting out into personal pensions ended in April 2012, the existing pot of pension money you have accumulated from those past contracted out payments remains.

You are probably going to be better off than worse off. For example, you can take an income from the contracted out pot from age 55 instead of state pension age. You can also do things like taking the income and a 25% tax free lump sum at age 55 and recycling them back into more pension contributions to further boost your eventual pension income. There are limits on how much lump sum can be recycled, if that interests you, ask. The easiest limit is that at least £15,000 is allowed.

GlynD

If you contracted out at 26 then your contributions pot will, like mine, have done very well. I'd take advice before acting but you can now have your personal pot and serps merged into one fund and although you cannot interfere with the serps bit it can help your personal contributions by earning more interest.

jamesd

You can also interfere with the SERPS bit now, it's treated just like any other pension contribution. Though some providers may still track it as a different source even though that is no longer required.

dunstonh

jamesd wrote: »

You can also interfere with the SERPS bit now, it's treated just like any other pension contribution. Though some providers may still track it as a different source even though that is no longer required.

If it was transferred, it would be merged into a single non-protected rights pot. It is only existing providers who had it classed as protected rights previously that are still showing it as a separate pot (typically called former protected rights or similar). This is mainly down to software issues and will go away over time. It doesnt affect the actual pension in any way if it is still segmented.

jamesd

No surprise that some providers have software issues and others either don't or just do an internal transfer of the money.