Contracted out SERPS

Noniepops

In 1988 I was advised to start a private pension, as I was young the only thing that was paid into this was my contracted out contribution, I have never paid any money into it directly myself. I am aware that in 2012 everyone was contracted back in (unless you signed not to - I think). My questions are:-

Did I do the right thing in contracting out and how do I find out what the impact on my state pension will be (if at all possible), I know what my predicted benefit will be as I get my annual statements.

I do have 2 further pension pots, one is a small one, with employer contributions only and I assume that my contracted out contributions moved to this one in 2001 - but I'm not sure? I also have (from 2004 to date) a final salary scheme pension.

Thank you

dunstonh

I am aware that in 2012 everyone was contracted back in (unless you signed not to - I think).

Everyone was back in by 2012 apart from defined benefit schemes which will be next year.

Did I do the right thing in contracting out and how do I find out what the impact on my state pension will be (if at all possible), I know what my predicted benefit will be as I get my annual statements.

If you were under the age of 45 and earned over £10k a year then you almost certainly are. You dont mention your age now but if you are middle aged now, then you stand to do very well out of it.

With the new state pension (and from the point you contracted back in), you would be building up qualification under the new single state pension to get the full amount. if you had 35 qualifying years under the new state pension then you get no deduction for the period you contracted out. Yet you keep your contracted out fund to do with as you wish (within pension rules). Even if you dont get 35 years full qualification, you are still likely to be better off and certainly not worse off.

I do have 2 further pension pots, one is a small one, with employer contributions only and I assume that my contracted out contributions moved to this one in 2001 - but I'm not sure?

That is not an assumption that you can safely make. You would have to have contracted out with the new pension for that to occur. Contracting out was coming to the end of its life (for new applicants) at that time as Labour reduced the rebates in their early years (a stealth tax) and it became less favourable.

If your final salary scheme is contracted out, then that would have taken over.

xylophone

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

You are now in your late forties with up to sixteen years to go before SPA?

Contracting out for DB schemes ends next April.

https://www.gov.uk/new-state-pension/overview

Obtain your "starting amount" from a state pension statement after April 6 next year.

Noniepops

Thanks both for the info, reassuring to know that I made the right choice, I know I should have been paying in additional funds sooner, but hopefully these last 11 years in a final salary will have helped ��