Scottish widows: We failed to contract you out of the additional state pension scheme

yogiberr

Hiya,

I received the following letter.
The full statement was:

"We failed to contract you out of the additional state pension scheme.
You may be due payment as a result of our error"

It's asking for kinds of information eg
Details of all P60's of your salary at the date you intended to contract out, and for all tax years since then etc.

It will be difficult for me to get this information.However, I obviously don't want to lose out, as a result of an error of whic h I'm entirely blameless.

Can anyone advise on how they managed to get the information or ensure that they didn't lose out?

Thanks,

yogi

robin61

I just found this old thread.
https://forums.moneysavingexpert.com/discussion/232458

Looks like your employer should be able to provide these.

jamesd

The Future Pension Centre can tell you their record of your earnings for every year that you worked. Be ready to take notes.

Your loss has probably been increased because the flat rate system will increase your state pension until you reach the full flat rate. A person who is not contracted out reaches that cap faster than a person who was contracted out. This means that your state pension will stop increasing sooner than it would have if they had contracted you out. Ask them to explain how their redress calculation accounts for this. They will probably say that it makes no allowance for this because all it does is consider the earnings-related part of the state pension, not the effect of additional flat rate years. You you then get to complain that the redress is not covering your actual loss.

greenglide

But having failed to actually contract the OP out wouldn't that have enabled the OP to build up AP that take his Single Tier (nSP) pension above the nSP total and generated a Protected Payment. Obviously this would depend on his age and earnings.

Presumably his "loss" is the NI rebates that would have been paid by HMRC to SW.

There may, in fact, be no loss?

jamesd

Yes, the initial single tier value would be higher and that's why the poster would have lost out.

The extra loss comes when they stop accruing more single tier state pension when they would have continued to accumulate more if they had been contracted out.

At the time when most of these cases happened the single tier didn't exist so the calculations were to be made on the difference between expected value of the contracted out pension and expected value of the forgone earnings-related part, with no caps involved.

Today that calculation is often largely meaningless because the single tier cap is what produces the loss and there's no way to work around that loss. People just stop accruing more earlier than they would if they were contracted out.

Say a person would have an outside pension pot of £10k from contracting out and a state pension amount of £90 if they had been contracted out, or no outside pot and a state pension amount of £110 is they had not been contracted out.

The single tier/flat rate is £155.65 and each year worked adds 1/35th of that until that cap is reached.

The first person needs to work for (155.65 - 90) / (155.65 / 35) = 14.76 more years to get to £155.65 of state pension. After that they won't get any more from working and paying in.

The second person needs to work for (155.65 - 110) / (155.65 / 35) = 10.17 more years. They won't get any more from working and paying in longer.

The contracted out person who has 14.76 years more that they can work has lost the whole £10k in this situation. Either way they get the maximum single tier pension amount but the contracted out one has that extra £10k.

yogiberr

hiya Guys,

Thanks for all the replies.I have my P 60's from my current employers.Can anyone suggest a way to get them all without having to manually contact every employer that I've had for the last 7 years? I've tried the HMRC sites, to get copies, but I just keep going round in circles..

It's pretty frustrating, given that none of this was caused by an error on my part.

Thanks,

yogi