State Pension and Contracted Out Deduction

TheGoldfish

My mother receives a state pension of £170 p.w. The main amounts are made up as follows -


basis state pension                                                                                   137.60
Pre 97 additional state pension                     40.17
less contracted-out Deduction                       11.32                                    28.85

What does the contracted out deduction relate to? The only other pension my mother receives is £50 p.m. from the Pension Protection Fund. This relates to my late father's pension. Is this what it relates to? The £11.32p.w. is about £50 p.m.

My mother did work for Barclays bank for at least 8 years in the 1960s but does not receive any pension from them.

CRISPIANNE3

TheGoldfish said:

My mother receives a state pension of £170 p.w. The main amounts are made up as follows -


basis state pension                                                                                   137.60
Pre 97 additional state pension                     40.17
less contracted-out Deduction                       11.32                                    28.85

What does the contracted out deduction relate to? The only other pension my mother receives is £50 p.m. from the Pension Protection Fund. This relates to my late father's pension. Is this what it relates to? The £11.32p.w. is about £50 p.m.

My mother did work for Barclays bank for at least 8 years in the 1960s but does not receive any pension from them.

From my own personal experience the contracted out part normally refers to a person being in a company pension scheme at some point of their working life.

zagfles

What employment did she have between 1978 and 1997? Did she pay into a personal pension which she's since cashed in, or a workplace pension which she's transferred out?

elouise01582

The contracted out deduction could originate from an occupational pension scheme such as membership of the Barclays 1964 Final Salary pension scheme.  I believe that this scheme did contract the member out of SERPS so that makes sense.  What they offered your mum when she left service could have resulted in a refund of her contributions.  The contracted out part would have been a guaranteed minimum pension (GMP) and no idea how they would have paid that back. Someone on here will know. Your mum may want to contact the scheme administrators to make sure she has no entitlement: https://epa.towerswatson.com/accounts/barclays/public/barclays-bank-retirement-contacts/

xylophone

Your late father was a member of a Contracted Out Pension Scheme?

Your mother is receiving a widow's pension.

Did the COD appear after she was widowed?

Does below throw any light?



https://www.thisismoney.co.uk/money/pensions/article-4739846/Why-state-pension-reduced-husband-died.html

elouise01582

Did you mother inherit any of your late father's additional state pension (that he would have built up through the state earnings related pension scheme (SERPS)?

TheGoldfish

zagfles said:

What employment did she have between 1978 and 1997? Did she pay into a personal pension which she's since cashed in, or a workplace pension which she's transferred out?

She didn't have any employment between 1978 - 1997. After I was born in '68 my mother decided to be a fulltime mum and housewife. She's had no personal pensions and no workplace pensions to transfer out.

She believes she did not work at Barclays long enough in the '60s to qualify for their pension scheme.

zagfles

elouise01582 said:

The contracted out deduction could originate from an occupational pension scheme such as membership of the Barclays 1964 Final Salary pension scheme.  I believe that this scheme did contract the member out of SERPS so that makes sense.  What they offered your mum when she left service could have resulted in a refund of her contributions.  The contracted out part would have been a guaranteed minimum pension (GMP) and no idea how they would have paid that back. Someone on here will know. Your mum may want to contact the scheme administrators to make sure she has no entitlement: https://epa.towerswatson.com/accounts/barclays/public/barclays-bank-retirement-contacts/

SERPS only started in 1978, so employment in the 1960's wouldn't be relevant

zagfles

TheGoldfish said:

zagfles said:

What employment did she have between 1978 and 1997? Did she pay into a personal pension which she's since cashed in, or a workplace pension which she's transferred out?

She didn't have any employment between 1978 - 1997. After I was born in '68 my mother decided to be a fulltime mum and housewife. She's had no personal pensions and no workplace pensions to transfer out.

She believes she did not work at Barclays long enough in the '60s to qualify for their pension scheme.

It must refer to the additional pension she inherited from your father then. Although I'd have thought they'd itemise it more clearly. What was her pension before your father died?

TheGoldfish

xylophone said:

Your late father was a member of a Contracted Out Pension Scheme?

Your mother is receiving a widow's pension.

Did the COD appear after she was widowed?

Does below throw any light?



https://www.thisismoney.co.uk/money/pensions/article-4739846/Why-state-pension-reduced-husband-died.html

Yes it did and the article does help a bit. My mother believes my father took a lump sum when he reached retirement age and then received reduced pension payments from his employer.

TheGoldfish

elouise01582 said:

Did you mother inherit any of your late father's additional state pension (that he would have built up through the state earnings related pension scheme (SERPS)?

Not sure. Before my father died she wasn't receiving any state pension although was above the retirement age. Someone else has said it is a widow's pension she is getting.