SERPS and what to do

britishbutch

Hi guys,

I've read some posts here, but can't seem to find the answer to my question.

So I contracted out many years ago, then was told I was being contracted back in, or advised to do so, I can't remember.

Anyway, I approached a company called [Removed by Forum Team] after seeing adverts from them about money I may be owed due to being contracted out. Something about compensation for my losses due to being contracted out.

I gather they're a legitimate company because I've not seen anything online advising otherwise, but when it came to PPI I didn't go through a company, I did it all myself. Has anyone done that with this? Am I actually entitled to compensation? Can I claim it back without going through a middle man? I've told them I don't want my pot touched, and am just interested in this compensation, but I'm worried about them, and at the same time interested in the compensation I might be eligible for.

Help please

Linton

Why do you think you are due compensation for contracting out? In many cases it was a requirement of an employers pension, particularly if the scheme was Defined Benefit. Even if contracting out was not a requirement you may well have gained from it.

Just because you haven’t heard of a company being a scam doesn’t mean it is legit. Most scams are never well publicised and those that are don’t become so until well after the scammers have disappeared with the loot. You are probably wasting your time talking to them, but whatever you do, don’t pay them any money up front.

Keith_Clunk

The compensation culture is not one of the human race's most admirable attributes.

Tom99

britishbutch wrote: »

Hi guys,

I've read some posts here, but can't seem to find the answer to my question.

So I contracted out many years ago, then was told I was being contracted back in, or advised to do so, I can't remember.

Anyway, I approached a company called [Removed by ForumTeam] after seeing adverts from them about money I may be owed due to being contracted out. Something about compensation for my losses due to being contracted out.

I gather they're a legitimate company because I've not seen anything online advising otherwise, but when it came to PPI I didn't go through a company, I did it all myself. Has anyone done that with this? Am I actually entitled to compensation? Can I claim it back without going through a middle man? I've told them I don't want my pot touched, and am just interested in this compensation, but I'm worried about them, and at the same time interested in the compensation I might be eligible for.

Help please

It's exceedingly unlikely you have anything to be compensated for. This is just marketing to lure you in and sell you some pricey advice you don't need.

Albermarle

When you were contracted out of SERPS , each year you gave up a portion of some entitlement to an increased state pension in later years .
However each year you were contracted out you received a payment into a personal pension , which eventually would become pension income in later years .
There was always some debate over whether it was better to be contracted in or out . To begin with it was thought better to be out, and then many years down the line it was thought better to be back in again .
It was all above board and there is no scope for claiming compensation as far as I am aware, as most people were not adversely affected, and if they were it was only by a minor amount . Some probably benefitted.
For me I was contracted out for over twenty years so my final state pension will be less, but I have a personal pension pot that compensates for that ( I worked it out once that the end result - in vs out- was about 50:50 )

p00hsticks

Albermarle wrote: »

For me I was contracted out for over twenty years so my final state pension will be less, but I have a personal pension pot that compensates for that ( I worked it out once that the end result - in vs out- was about 50:50 )

And with the introduction of the new State Pension, many of those previously contracted out have become winners, as if they have a few years to go to StatePension age they now have the opportunity to make their NI record up to qualify for the new maximum pension (c. £168) whilst also retaining their personal pension pot

Brynsam

Albermarle wrote: »

When you were contracted out of SERPS , each year you gave up a portion of some entitlement to an increased state pension in later years .
However each year you were contracted out you received a payment into a personal pension , which eventually would become pension income in later years .

Not if it was a contracted out occupational pension - in which case OP paid lower NI contributions.

OP, if your contracting out resulted from membership of a company (occupational) scheme, then you were definitely better off by joining the scheme.

See https://forums.moneysavingexpert.com/discussion/2863622 (particularly post 430 in that thread - old but still good!).

If you were in a personal pension and can't remember if you were 'advised' or not, there's no chance of compensation. Probably no chance anyway, given that at the time/on the basis of the information available, contracting out appeared to be an excellent idea, so the advice would not have been negligent or inappropriate.

Albermarle

And with the introduction of the new State Pension, many of those previously contracted out have become winners, as if they have a few years to go to StatePension age they now have the opportunity to make their NI record up to qualify for the new maximum pension (c. £168) whilst also retaining their personal pension pot

I think if your were never contracted out and qualified for SERPS /SS2, you can get more than £168 as part of the transitional arrangements . Otherwise would not be fair on those who never contracted out.
The calculation is quite complicated !

p00hsticks

Albermarle wrote: »

I think if your were never contracted out and qualified for SERPS /SS2, you can get more than £168 as part of the transitional arrangements . Otherwise would not be fair on those who never contracted out.
The calculation is quite complicated !

Yes you can get more, but only if you already had over £168 at the time of the introduction - and you then have no opportunity to increase it further going forward.

So the losers from the changes are really those who were contracted in, had already accumulated around £168 in relatively few years but have now lost the opportunity to increase it further even though they might be relatively young.

SonOf

edit - post deleted

jamesd

britishbutch wrote: »

So I contracted out many years ago, then was told I was being contracted back in, or advised to do so, I can't remember.

Forgetting about it is likely to be best. The introduction of the single tier state pension made most who were contracted out winners because within a broad range they can get both the state pension and the money from being contracted out while those who didn't contract out get only the state pension.

The old state pension system has no cap on its earnings-related part, with even low earners expected to get around 190 a week from the combination of basic and earnings-related state pensions. The single tier system let people above its now 168.60 cap keep the extra. Those below the cap continue to accrue until they reach the cap.

This tends to mean that those who didn't contract out and carry on working after April 2016 pay full NI but accrue no more state pension. While those who contracted out pay the same NI but do continue to accrue more state pension entitlement.

The chance of being worse off is now well below the 1% that SonOf mentioned.

In addition to SonOf's questions, how did you invest the contracted out rebate money?