Serps Opted Out

Mike40

I did for a number of years opt out of Serps due to some dodgy advice from a pension provider. I opted back in to the State Scheme a number of years ago and I fully expect to still get my 30 years in to get a full pension. I have a total of about £14k in a protected fund managed by Friends Life.

So my question is this:

Can I claim my two state pensions at 65 and now claim the £14k under the new pension rules as a total lump sum??

Also I have heard that there is a Serps miss-selling compensation scheme, is it worth going to one of these firms to see if I was miss-sold opting out?? Any money won that gets put into my fund would be a bonus….. :cool:

The original company has since gone and Friends Life now has my pots.

I am 55 this year if that is important...!!

dunstonh

I did for a number of years opt out of Serps due to some dodgy advice from a pension provider.

Probably a good thing then.

I opted back in to theState Scheme a number of years ago and I fully expect to still get my 30 yearsin to get a full pension.

When do you hit state pension age?

Also I have heard that there is a Serps miss-sellingcompensation scheme, is it worth going to one of these firms to see if I was miss-soldopting out?? Any money won that gets put into my fund would be a bonus…..

There is no serps mis-selling compensation scheme. That is the sort of thing that dodgy claims companies tell you. Indeed, the regulator did a review of contracting out of SERPs some years back and found just a potential failure rate of 1.5%. i.e. 1.5% could be mis-sold. That is actually a very low failure rate on any retail product. They also published a guide to see if you were mis-sold. Effectively, if you under the age of 45 at the point of contracting out, then you were suitable to be contracted out.

http://webarchive.nationalarchives.gov.uk/20100407120701/moneymadeclear.fsa.gov.uk/pdfs/s2p_wrongly_advised_ink.pdf - see page 4 for flowchart.

There are not many claims companies operating in this field as a 1.5% failure rate means only around 1 to 2 in 100 complaints will succeed. There are, however, a couple of dodgy claims companies that put in complaints using a scattergun approach template letter hoping something sticks. However, their main objective is to find out about your pension as they then tell you that you can transfer it elsewhere and get a better deal. They then make around 5% commission out of it. The complaint is a red herring to get a commission on the pension transfer. Effectively, you end up being mis-sold by a company telling you that you were mis-sold.

Most people now are better off through contracting out. Not worse off. It has changed over the years and there have been periods when people were worse off. In 1996, the SIB did a review and found everyone that contracted out up to that point was better off. By 2001, it had fallen to half. With more reduction in contracted in benefits (with no reductions to contracted out) and the opening up of the contracted out benefits, you now find most people are better off.

Kevnic

I also contracted out under similar circumstances in my early twenties - still wet behind the ears when it came to money and investments. I was advised to contribute to a FSAVC which would provide additional income to my Public Sector scheme. I was also told that I would get an extra tax free lump sum....sound familiar?

Anyway, a few years later I successfully claimed for a mis sell when I found out that this product did not include an option for a lump sum as I already had a superannuated pension. The FSAVC is now a SIPP with HL and ironically, I am now entitled to take a tax free lump sum from the fund albeit 25%.

dunstonh

I was also told that I would get an extra tax free lump sum....sound familiar?

never heard that before. FSAVCs couldnt give a lump sum until April 2006. If that is what the documentation showed then it would be an easy mis-sale complaint. FSAVCs have gone through periods when they were considered good things and bad things. Indeed, you could have had some complaints succeed that would fail if the complaint was made at a different date. FSAVCs had a higher failure rate than contracting out.

However, FSAVCs have nothing in common with a contracting out decision.

Kevnic

dunstonh wrote: »

never heard that before. FSAVCs couldnt give a lump sum until April 2006. If that is what the documentation showed then it would be an easy mis-sale complaint. FSAVCs have gone through periods when they were considered good things and bad things. Indeed, you could have had some complaints succeed that would fail if the complaint was made at a different date. FSAVCs had a higher failure rate than contracting out.

However, FSAVCs have nothing in common with a contracting out decision.

I originally opted out around the mid eighties. The financial advisor was from a company called Canon Lincoln. (Last I heard they had rebadged to Lincoln National but not sure if they still exist)?

I didn't find out about the lump sum issue until around 2004. Fortunately, I had the original paperwork which highlighted a tax free lump sum as one of its features.

As you say, from there it was a simple process to get compensation.