SERPS Compensation

jojo497

Hi All
Apologies if this has been asked many times before but I have seen an advert on Facebook for SERPS compensation. It intrigued me as I as a very unsavvy 18 year old was told to sign up to this back in 1989 for the company I worked for at the time. I had no idea what it meant but was told it was a good thing and to sign.. so I did. It was with Standard Life and I now have a pot of @£20k (which equates to a very measly £1,100 a year from retirement age (I am 45 now)

What could I hope to benefit from if I sign up with this company (SERPS REVIEWS.CO.UK) Can anyone offer advice as to what I should do please?
Thanks

dunstonh

Apologies if this has been asked many times before but I have seen an advert on Facebook for SERPS compensation.

SERPS compensation is rarely comes up but does occasionally. There are only a couple of CMCs involved in this area and they have ulterior motives.

It intrigued me as I as a very unsavvy 18 year old was told to sign up to this back in 1989 for the company I worked for at the time. I had no idea what it meant but was told it was a good thing and to sign.. so I did. It was with Standard Life and I now have a pot of @£20k (which equates to a very measly £1,100 a year from retirement age (I am 45 now)

The optimal age for contracting back in was around age 45. So, at age 18, you were well below the contracting in age.

The measly £1100 a year as you call it is because the pot is only £20k. However, it would be equally measly had you stayed contracting in.

With the single state pension and you having another 23 years to build NI contributions, contracting out was probably a very good move that has made you financially better off. You have a current pot of £20k (that will grow) that is yours in retirement. Your state pension will not be reduced significantly. Indeed, you may not see any reduction depending on how many qualifying years you have contracted in (on the old system) and on the new system.

Most people who have contracted out are better off. The FSA did a review some years back and found that just 1.5% of people who contracted out may have been worse off. Their flowchart (on page 4 on the following link) makes it nice and easy for you:
http://webarchive.nationalarchives.gov.uk/20100210151716/moneymadeclear.fsa.gov.uk/pdfs/s2p_wrongly_advised_ink.pdf

The ombudsman publish their complaints stats. For SERPS in 2015/16 they had 218 complainst reviewed and upheld just 16. A total of just 5%. That includes any complaint to do with SERPS (which may not be to do with the sale but something about an event on a SERPS plan). So, you can see that this is really a non-issue.

What could I hope to benefit from if I sign up with this company

A speculative letter being sent to the original seller making a bunch of allegations which may or may not be true. Whilst, in the meantime your details would be passed to a third party who will try and sell you a pension transfer and earn from that. They are using the sprat to catch a mackerel method.

dumpyboy

When this matter brought up about SERPS compensation my mate told he was so much worse off for opting out , I told him I think I was better off as my pension forecast was 4 pound short of full single tier pension at 48 , plenty of time to make that 4 pound a week up

dunstonh

dumpyboy wrote: »

When this matter brought up about SERPS compensation my mate told he was so much worse off for opting out , I told him I think I was better off as my pension forecast was 4 pound short of full single tier pension at 48 , plenty of time to make that 4 pound a week up

Same here. I did a state pension projection recently for myself and I had 12 years contracted out yet I am on track for a full state pension pension. It I hadnt contracted out, I would be getting the same state pension but not have as much in my personal pension.

AnotherJoe

dunstonh wrote: »

Same here. I did a state pension projection recently for myself and I had 12 years contracted out yet I am on track for a full state pension pension. It I hadnt contracted out, I would be getting the same state pension but not have as much in my personal pension.

Exactly the same for me.

Mersey_2

This article states that most face a lower pension as a result (but obviously that's only if they take no action):


www.telegraph.co.uk/pensions-retirement/financial-planning/face-a-smaller-state-pension-because-you-were-contracted-out-her/


The Telegraph wants to hear from people who face a lower pension as a result: [EMAIL="Olivia.rudgard@telegraph.co.uk"]Olivia.rudgard@telegraph.co.uk[/EMAIL]

dunstonh

This article states that most face a lower pension as a result (but obviously that's only if they take no action):

article is focusing on contracted out as part of a final salary scheme and not contracted out as part of a money purchase scheme. Same terminology but very different outcomes. Those in contracted out final salary schemes paid lower NI. The scheme was paying the pension benefits. Whereas, those that contracted out using money purchase schemes paid the same NI as those contracted in but had a rebate paid to their personal pension.

With final salary schemes (and some occupational money purchase schemes) you had no choice and cannot make mis-sale allegations. With individual money purchase schemes you can complain as you had a choice.

The serps claim chasers are not interested in occupational schemes.