SERPS - advice please

Sunshine_and_Roses

About 25-30 years ago, when i was about 18, I was advised to contract out of SERPS and start a private pension (with Barclays). I was on sick leave at the time, so the contributions were paid by the government. This lasted for less than a year, then I was back in employment and did not pay any other contributions into the Barclays pension.

A couple of years later I joined a company pension scheme and paid into that for 10 years, then moved jobs and joined a new pension scheme which is still running 13 years later.

I had completely forgotten about SERPS until I heard it in conversation recently. How will this effect me in the future? Is there anything I need to do now?

Any help or advice would be really appreciated.

Linton

Suggest you get a State Pension forecast from https://www.gov.uk/check-state-pension. That will tell you the exact implications. If you were only contracted out for a short time I would expect that the hit will be swamped by the benefits from the time you were contracted in. Are you sure you were contracted in again when you resumed employment?

xylophone

Presumably you still have the old contracted out SERP pension policy - are you receiving statements?

With regard to the 10 year company pension, was this a DB scheme? if so, this is likely to have been contracted out.

If so, presumably you have a deferred pension within the scheme -
otherwise, you have a pension arrangement elsewhere with a provider provider in respect of this pension.

Are you receiving statements?

What type of pension is your current pension? Even if DB, contracting out has now ended.

With regard to the effect of contracting out on your state pension, see

https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service

You can obtain a new state pension statement.

https://www.gov.uk/check-state-pension

Sunshine_and_Roses

No, I don't think I was contracted in. Cant remember that much about it as it was so long ago.

Sunshine_and_Roses

I receive statements from all three, annually.

Can I ask what DB stands for (sorry if obvious)

Thank you for the links, will look into these.

xylophone

Can I ask what DB stands for (sorry if obvious)

Defined Benefit.

https://www.gov.uk/pension-types

AlanP_2

clareski wrote: »

I receive statements from all three, annually.

Can I ask what DB stands for (sorry if obvious)

Thank you for the links, will look into these.

DB = Defined Benefit (sometimes called Final Salary in previous years). Pays a pension of £x per year based on Years Service * Accrual Rate (1/50th to 1/80th typically I would think) * Final Salary.

DC = Defined Contribution = Pot of Money available for you to use at retirement age. Employer & Employee pay in x% a year, but what it will be worth at retirement is down to the performance of the underlying investments chosen.

dunstonh

No, I don't think I was contracted in. Cant remember that much about it as it was so long ago.

The company pension scheme, if that was a contracted out one, would trump Barclays. i.e. Barclays would be contracted out on paper but not actually getting any rebates as the company scheme was prioritised before it.

A couple of years contracted out during your working life will almost certainly not make any difference to your state pension.

Obtaining an online state pension projection will tell you if it has had an impact and it will also tell you what years you were contracted in or out.

Lots of people who contracted out are much better off because they did. Especially if they have enough working life to qualify for 35 years of being contracted in.

Sunshine_and_Roses

Government website shows I will receive a max of £159.55 in 2039.

You’ve been in a contracted-out pension scheme

Like most people, you were contracted out of part of the State Pension.

Your State Pension forecast is provided for your information only and the service does not offer financial advice. When planning for your retirement, you should seek professional advice.


Does this sound right?

dunstonh

clareski wrote: »

Government website shows I will receive a max of £159.55 in 2039.

You’ve been in a contracted-out pension scheme

Like most people, you were contracted out of part of the State Pension.

Your State Pension forecast is provided for your information only and the service does not offer financial advice. When planning for your retirement, you should seek professional advice.


Does this sound right?

yes. it sounds right. You, like many others, have been able to build up a working life of 35 years contracted in. The contracted out years have effectively dropped off. I am in the same boat as I had a period of being contracted out but I am getting the full state pension.

Sunshine_and_Roses

I have been looking through my paperwork and at March 2016 I have:

ReAssure (Barclays) Current Value £2370.40 (could pay £95 per year at age 65) Lucky me!!
Company pension 1 Annual pension of £3550 at age 60
Company pension 2 Annual pension of £5768 at normal pension age (67 or 68?)

Both company pensions are 1/60

I may be made redundant early next year, so would be looking at another company pension scheme with a new employer. Is it best to keep all pensions separate, especially as company pension 1 pays out 7 years before company pension 2?