opted out serps/ssp and NI rate query

Ant555

background
I opted out of serps way back in the 90s and receive a statement every year with the fund value etc.
At the time I was also contributing to a private pension with the same lifeco (this has been static with no additional contributions for 10 years) - I get separate annual statements, same envelope.


Would I have been paying a lower NI rate for the time I was 'opted out' or is it likely to have been just the annual rebate paid in to the contracted out scheme.

Thanks

dunstonh

Would I have been paying a lower NI rate for the time I was 'opted out' or is it likely to have been just the annual rebate paid in to the contracted out scheme.

A lower NI rate applies to a different type of scheme. Contracting out of SERPS (not opt out as that means something different) would not lower your NI. It just resulted in a rebate going to the life company.

Ant555

Cheers.

You are correct I was 'contracted out' into a protected rights scheme.

Thanks for the info on the NI.


PS - i'll post back here in 20 years with an update as to whether it was actually a good idea to contract out!

dunstonh

PS - i'll post back here in 20 years with an update as to whether it was actually a good idea to contract out!

Probably will be. Since contracting out began, contracted in benefits have been reduced 4 times. The recent state pension age changes make it a 5th. Yet contracted out benefits have not been reduced. Indeed, the options on what to do with the money have increased.

in general terms, contracting out from about 97 onwards was considered cost neutral (in 1996, the SIB found that everyone that had contracted out to that point was better off). However, the way you can access your money and the choice of age is far better with contracting out. With you getting almost 20 years on the new state pension, you should be a winner.