Contracted Out - Was The Impact On Our State Pensions Really Communicated Properly?

Silvertabby

molerat said:

This only seems to be a perceived problem for post 2016 retirees.  Is it because of the ill informed press headlines for the single tier pension and everyone getting £203.85 for 35 years contributions ?  Doesn't seem to be many pre 2016 retirees complaining they are not getting £360.86 per week.

Exactly.  Those who were contracted out knew, and accepted, that they wouldn't get the SERPS/SP2 that they hadn't paid for.

michaels

Silvertabby said:

molerat said:

This only seems to be a perceived problem for post 2016 retirees.  Is it because of the ill informed press headlines for the single tier pension and everyone getting £203.85 for 35 years contributions ?  Doesn't seem to be many pre 2016 retirees complaining they are not getting £360.86 per week.

Exactly.  Those who were contracted out knew, and accepted, that they wouldn't get the SERPS/SP2 that they hadn't paid for.

AS mentioned ad nauseam, it is those who had paid for s2p/serps by not contracting out but still aren't getting it who have the most to complain about.

sausage_time

Somewhat related - is there a way to see how much the DSS paid to my DC pension while I was contacted out back in the day?  My pension docs and statements seem strangely silent on this, and I can't see any way on the gov.uk site.

zagfles

sausage_time said:

Somewhat related - is there a way to see how much the DSS paid to my DC pension while I was contacted out back in the day?  My pension docs and statements seem strangely silent on this, and I can't see any way on the gov.uk site.

If you know how much you were paid you can work it out, google "contracted out rebates amount"

dunstonh

Somewhat related - is there a way to see how much the DSS paid to my DC pension while I was contacted out back in the day? 

Yes.  Your pension transaction history will show it.

Marcon

Silvertabby said:

molerat said:

This only seems to be a perceived problem for post 2016 retirees.  Is it because of the ill informed press headlines for the single tier pension and everyone getting £203.85 for 35 years contributions ?  Doesn't seem to be many pre 2016 retirees complaining they are not getting £360.86 per week.

Exactly.  Those who were contracted out knew, and accepted, that they wouldn't get the SERPS/SP2 that they hadn't paid for.

The snag is that many hadn't a clue and weren't interested enough to check what it meant, or simply didn't even realise they had anything to think about! 

xylophone

When I was young ( and a lovely thing I was too  ) I didn't give the DB pension a thought or the state pension either - passed me by like the idle wind I regarded not....

It was only much later that circumstances required me to do some research and for some peculiar reason, the GMP/COD business developed a strange fascination... needed to get out more?

sevenhills

Marcon said:

GSP said:

As far as I remember being CO happened probably over 30 years ago when I was a much younger man in his late twenties (being younger was much less pension savvy). I maybe wrong but it was done to apparently give us more money in our payslip (unless I am getting confused with salary sacrifice)?

I’m not sure if we had a choice though, just what were the advantages of being contracted out? Was it something that benefitted the employer more than the employee?

It seems now who would be ‘contracted out’ if they had a choice? Is there something ‘a bit wrong’ with the whole concept and should it ever had been brought in?

Seems we just have to accept the ‘initiative’ and pay these extra years. Just who would have agreed with this at the time if they knew they had to make extra payments totalling thousands of pounds now?

Are we the ones at fault and having to pay for it now? Contracted out seems very murky to me.

Hopefully everyone in a contracted out final salary scheme (which is what I suspect you were in), because they not only paid lower National Insurance, they will have a DB pension well in excess of the alternative: state pension only.

You don't have to make 'extra payments totalling thousands of pounds'; your choice if you wish to do so. You're still vastly better off by having a pension from a DB scheme which was contracted out.

You are also overlooking the fact that the state pension system was a very different animal 30 years ago...

I worked for a private company and was contracted out, not sure why everyone thinks it was just DB pensions.
Very difficult for an ordinary person to know if they are better or worse off.
I ended up with a Prudential pension to the value of around £40k, I understand that the Prudential were better than other pension companies.

xylophone

I worked for a private company and was contracted out, not sure why everyone thinks it was just DB pensions.

A private sector company  (whether a PLC or not) could sponsor a DB or a DC scheme or indeed a scheme which had features of both (hybrid)).

It was possible (though not common I think) for a DB scheme to be contracted in.

Over a number of years of reading posts on the forum I think I've seen only two or three references to CIDB).

It was also possible for an individual to contract out into a personal pension.

Public Sector Schemes were contracted out.

https://techzone.abrdn.com/public/pensions/Tech-guide-contracting-out#:~:text=Contracting out was a method,SERPS) for particular tax years.

sevenhills

I contracted out and got a small personal pension at the same time.