opting out of State pension

xxdeebeexx

Just a quick question that i hope someone can answer for me.


My sister seems to think that, many years ago, she completely opted out of paying into a state pension in favor of paying into a company pension.
Is that possible?



tia


dx

Silvertabby

No. As a member of a contracted out (not opted out - that's something entirely different) occupational pension scheme, your sister would have paid reduced NI. Meaning that she wouldn't accrue any additional State pension (SERPS/SP2) but she would still accrue an entitlement to what used to be called the basic State pension.

So, she will have a State pension of some description plus her contracted out occupational pension.

tacpot12

Basically no. You can't opt out of paying National Insurance contributions if you are employed.

What she is likely to have done is opted out of SERPS, this is the State Second Pension. She is likely to have some entitlement to the State Retirement Pension and can check what she has here:
https://www.gov.uk/check-state-pension

She might also make voluntary National Insurance contributions if she needs to make up any missed years.

Carrot007

No. You were for a time able to opt out of the enchances state pension (and were generally advised to).


But they stopped that a while back and you are back in.


You could check wheather you will have enough contribution to get it online.


Other people may be better with dates and the website! But google will help you otherwise!

molerat

No. You were able to contract out of the second state pension. Tell her to get a state pension forecast. https://www.gov.uk/check-state-pension

Ciprico

....does this mean if two people had similar jobs/age etc and one contracted out and the other didn't, they will both get the same state pension today (assuming enough contributions), but the one who contracted would also have the extra contracted out payments in their personal pension - so they'd be better off, or does the govmt somehow claw the extra back....?

MallyGirl

no - the one who did not contract out would get their SERPS added on

PennyForThem_2

Unless.....she opted for the married woman's contribution......

Which I did until I realized that it meant would get #### all as a state pension. Depends how old she is but this might have been prevalent advice in 70's.

hyubh

123mat123 wrote: »

....does this mean if two people had similar jobs/age etc and one contracted out and the other didn't, they will both get the same state pension today (assuming enough contributions), but the one who contracted would also have the extra contracted out payments in their personal pension - so they'd be better off, or does the govmt somehow claw the extra back....?

For someone who reached state pension age after 5/4/16, if they had already accrued more than nSP at that point, they didn't lose the difference, but couldn't then earn more state pension beyond it, even if they hadn't reached their maximum possible additional state pension under the old system. In contrast, their peer who had contracted out and was on course to get a lower state pension, in total, now has the chance to earn state pension they would not have been able to earn under the old system.

Despite this, the usual moan on this board is from formally contracted out people who don't realise they are actually the winners under the new system (or more exactly, the transitional arrangements for it)...

(PS - there are scenarios where a formally contracted out person can lose out. They are relatively very rare however.)

xxdeebeexx

PennyForThem wrote: »

Unless.....she opted for the married woman's contribution......

Which I did until I realized that it meant would get #### all as a state pension. Depends how old she is but this might have been prevalent advice in 70's.

She must be 64ish so it's possible that she opted for this.
I will mention to her again that she'd likely to have some state pension. She has moved abroad in the last few years so not likely to be found by DWP


many thanks


dx

noh

She needs to check her entitlement,
See here on ways to do this.
https://www.gov.uk/check-state-pension