Was I give bad advice to opt out of the state pension

little_dove

Hi, I know this is a question asked alot but in the very early 90's I was advised to opt out of the state pension. I was very young at the time & trusted the person ( family friend ) to guide me. I am now approaching 40 with 2 children. I am a stay at home mum, but I am now worried that my private pension wont amount to much, & what will happen when I retire.
Was I given bad advice to opt out, I know I was given bad advise on taking out a couple of endowments that payed out just what I paid into them.
Just need to know what I need to do now please to cover me for "old age"
Thank you.

Thrugelmir

Saving is the only way of providing for retirement. A balance has to be made as to what you spend now and what you put aside.

Mojisola

little_dove wrote: »

Hi, I know this is a question asked alot but in the very early 90's I was advised to opt out of the state pension. I was very young at the time & trusted the person ( family friend ) to guide me. I am now approaching 40 with 2 children. I am a stay at home mum

If you're getting Child Benefit, aren't you getting credits for the years of child-rearing?

dunstonh

Hi, I know this is a question asked alot but in the very early 90's I was advised to opt out of the state pension.

You cannot contract out of the state pension. You could only contract out of SERPS. A second state pension.

I was very young at the time & trusted the person ( family friend ) to guide me. I am now approaching 40 with 2 children. I am a stay at home mum, but I am now worried that my private pension wont amount to much, & what will happen when I retire.

If you were aged under 43 then you were almost certainly given the right advice. As a stay at home mum, being contracted out made no difference to being contracted in. You have to be working and paying class 1 NI to be contracted out (and you cant be contracted out any more either)

Was I given bad advice to opt out, I know I was given bad advise on taking out a couple of endowments that payed out just what I paid into them.

Nothing you have said suggests you have been. The FSA did a review of contracting out many years ago and found a failure rate of about 1.5% could have been mis-sold. They published a guide and a flowchart which effectively said that if you were under 40-45 when contracting out you were fine. The FOS publish stats on complaints and uphold rates and the most recent stats showed they only uphold 1% of complaints. A really tiny amount. Its not considered an area with any real issues.

xylophone

At the moment you are receiving credits towards the basic state pension because you are receiving child benefit?
By the time you are eligible to take state pension, the Single Tier state pension will have been in operation for some twenty five years.

You will need thirty five years NI contributions paid or credited to qualify for the full basic state pension.
http://www.guardian.co.uk/money/2013/jan/14/single-tier-pension-what-state-pension-changes-mean

You contracted out of the Second State Pension so have a pension policy with an insurer- is it worth exploring whether you can resume contributions into this plan? Or whether it would be worth transferring the plan into one with lower charges and then contributing? http://www.cavendishonline.co.uk/pensions/transfers-and-repensioning/ https://www.moneyadviceservice.org.uk/en/categories/transferring-between-pension-schemes

http://www.hmrc.gov.uk/incometax/relief-pension.htm See "What happens if you don't pay tax"

http://www.litrg.org.uk/low-income-workers/employed/pensions-for-employees

atush

Check with the pensions agency to find how many years you have. You will continue to accrue years until your youngest is 12.

As for pension, you can contribute, as a stay at home mum, 2880 each year which will be rounded up by HMRC to 3600 while you are not working. So, do it.

PS, make sure the CB is paid in your name, not the OH.