Attention 55-66 year olds, who remembers serps? Who opted out?

spurdog1

35 years ago we were offered to opt out of SERPS. I'm curious who in numbers is affected by this.

I opted out, but within 3 years we were all brought back in. (The offer was to pay less, and make more money of your own pension pot).
So it comes to pension, I and many like me i'm sure have been cut back on the pension. The problem comes when I have contributed 45 years of payments, when the threshold for a full state pension is 35 years.

I am certain that the maths is 45 (years)- less 3 years =42 years should be paid (the 35 qualifying). Full contribution. But I have been told 35years minus the three is 32/35 contribution.
The thrifty government will save....£1.92 a week from me, and I reckon many out there as well opted out but overpaid.

Remembering it was 35 years ago, it seems mean penny pinching from the government. Are you in this trap, have you been caught? Are you unaware yet?
Just curious, but do feel it is unfair.

molerat

A total misinterpretation of how the pension amount was arrived at.  Unless you were born after around 2000 35 years is of no relevance to your pension whatsoever.

There cannot be many reaching retirement age now that cannot achieve a full new pension amount.

Secret2ndAccount

spurdog1 said:

...

I am certain that the maths is 45 (years)- less 3 years =42 years should be paid ...

And I am certain that you are wrong. Now what happens?

xylophone

35 years ago we were offered to opt out of SERPS. I'm curious who in numbers is affected by this.

I opted out, but within 3 years we were all brought back in. (The offer was to pay less, and make more money of your own pension pot).

Back in 1986, you worked for a company which offered a pension scheme.

The Scheme was contracted out for three years?

The Scheme then contracted back in?

In your whole working life you were only ever contracted out for three years?

Have you obtained a State Pension Forecast?

What exactly does it say?

How many Full Years (this would be contracted in OR out) did you have at 6/4/16?

spurdog1

A bit pedantic, no its not the company pension opt out, its the state pension opt out.. State Earnings Related Pension Scheme (SERPS).
Secret second, very helpful, NOT.

spurdog1

molerat said:

A total misinterpretation of how the pension amount was arrived at.  Unless you were born after around 2000 35 years is of no relevance to your pension whatsoever.

There cannot be many reaching retirement age now that cannot achieve a full new pension amount.

in 2000 you won't have had the serps option (joining workforce at 2000). its for 55+ earners. Born in 2000 hardly starts w2ork yet, especially in university. 

Dazed_and_C0nfused

The bit you are failing to grasp is that new new State Pension rules only apply in full to those starting to accrue NI years from 2016 i.e. mainly youngsters.

Everyone else is currently under transitional rules where having 34 years of NI contributions doesn't matter.  You had a starting amount calculated in 2016 and could then add to this with each additional qualifying year until you reached £185.15 (current year value).

If you had already accrued more than the standard amount you couldn't increase that with post 2016 contributions.

There are one of two regulars on here who have around 50 years and still haven't reached £185.15.  But they understand the new system and I think would consider themselves to be winners.  Better to have the vast majority of the new State Pension than all of the old basic State Pension.

QrizB

spurdog1 said:

Secret second, very helpful, NOT.

Nevertheless, s/he is correct and you are wrong.

spurdog1 said:

molerat said:

A total misinterpretation of how the pension amount was arrived at.  Unless you were born after around 2000 35 years is of no relevance to your pension whatsoever.

There cannot be many reaching retirement age now that cannot achieve a full new pension amount.

in 2000 you won't have had the serps option (joining workforce at 2000). its for 55+ earners. Born in 2000 hardly starts w2ork yet, especially in university. 

"Needing 35 years contributions for a full NSP" is only unconditionally true for people who start paying NI in 2016 or later, ie. born after 2000.

Everyone else, including you and me, is under transitional arrangements. We might need 35 years by sheer coincidence, we might need more, we might need less.

Do you have a state pension forecast?

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

Silvertabby

spurdog1 said:

molerat said:

A total misinterpretation of how the pension amount was arrived at.  Unless you were born after around 2000 35 years is of no relevance to your pension whatsoever.

There cannot be many reaching retirement age now that cannot achieve a full new pension amount.

in 2000 you won't have had the serps option (joining workforce at 2000). its for 55+ earners. Born in 2000 hardly starts w2ork yet, especially in university. 

That's molerat's point.  The oft quoted 35 years only really applies to those who started work after 2016.  ie, those BORN after 2000.

The rest, particularly those of us in the 55 - 66 age group, fall under transitional arrangements with our own individual calculations.  The majority of us in this age group are likely to have been contracted (not opted) out of SERPS/SP2 in the past, and so will need more than 35 years.

In my case, I needed 48 years of NI contributions (44 from work, 4 from paying voluntary Class 3s) as I was contracted out for the maximum 38 years (1978 to 2016), but I'm certainly not complaining.  I'm actually a winner under the new pension rules, as I'm young enough to have been able to qualify for the full £185.15 per week.  Under the old scheme, my State pension would have been less than £150 per week. 

NedS

I am around that age, and was contracted out for a number of years. I have just achieved a full state pension forecast with 34 years of contributions. My partner is similar, although contracted out for a little longer and achieved their full state pension forecast after 37 years. The point being that it will be different for everyone depending upon their individual circumstances.

Like others have said, the 35 year rule only applies to those starting work after 2016, so may apply to our children (assuming the rules don't change again), but not us.

sevenhills

spurdog1 said:

Remembering it was 35 years ago, it seems mean penny pinching from the government. Are you in this trap, have you been caught? Are you unaware yet?
Just curious, but do feel it is unfair.

I opted out back in those days. I have a poor memory but I recall it being a no brainer. That was the advice, no Google back then.
Around the same time, I assume it was linked, I enrolled in a private pension. I only paid in £20 per month, but it was frozen when I moved banks and stopped paying.
I was only in the private pension for a couple of years, but together with the SERPS I was able to use it as a deposit for a house just over twenty years later.
So it was a positive for me.