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

Marcon

sevenhills said:

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

Known as an 'appropriate' personal pension, although who dreamed up that bit of jargon goodness only knows!

dunstonh

Marcon said:

sevenhills said:

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

Known as an 'appropriate' personal pension, although who dreamed up that bit of jargon goodness only knows!

Back in the day, financial products were often named through their legislation. e.g. Section 226 Retirement annuity contract which got its name from section 226 of the Income & Corporations Taxes Act 1970

or section 32 buy out bond which came from Section 32 of the Finance Act 1981.

Appropriate Personal Pension Plan was the first move away from that style of naming but it was only a small step.    It came about because of the Personal Pension Schemes (Appropriate Schemes) Regulations 1987.   The legislation made reference to "Appropriate Scheme" throughout.    With Personal Pensions replacing RACs in 1988, it led to Appropriate Personal Pensions being used to differentiate between contracted out personal pensions and ordinary rights built up personal pensions.

Slippers1

I was made redundant from HMRC after 35 years, I'm now 66 and about to get my state pension, this will not be a full pension despite 45 full years of contributions because of being contracted out.  Government gateway states my pension provider Civil Service pensions will pay that the amount quoted on the gateway but HR at Civil Service Pensions will not confirm. Could anyone advise please 😊 thanks

Dazed_and_C0nfused

Slippers1 said:

I was made redundant from HMRC after 35 years, I'm now 66 and about to get my state pension, this will not be a full pension despite 45 full years of contributions because of being contracted out.  Government gateway states my pension provider Civil Service pensions will pay that the amount quoted on the gateway but HR at Civil Service Pensions will not confirm. Could anyone advise please 😊 thanks

It isn't really a specific element of your civil service pension so they won't quote an amount.

But you paid less NI whilst contracted out and get your civil service pension and the State Pension you were always expecting to get, not less.

In fact you may well be a winner under the transitional rules as you might be able to buy post 2016 years to bump up your expected State Pension to the standard new State Pension?

What exactly does your forecast show?

How much is the COPE figure?

Slippers1

Hello thanks for replying. I cannot pay any additional sums to boost state pension as too late! COPE amount on government gateway shows £44.64 all I wanted to know from my pension provider if this is on top of my civil service pension. When I was made redundant I took a lump sum as it was Covid and unfortunately I haven't been able to work since, so my works pension is less due to the lump sum, paid less NI but unfortunately I was not given the option of contracting in or out. 

QrizB

Slippers1 said:

I cannot pay any additional sums to boost state pension as too late!

What exactly do you mean by "too late"? Have you already paid NI for every year since 2016?

Slippers1 said:

... all I wanted to know from my pension provider if this is on top of my civil service pension.

No it isn't. It's an imaginary amount of money. Your CS pension is what it is.

Slippers1 said:

When I was made redundant I took a lump sum as it was Covid and unfortunately I haven't been able to work since, so my works pension is less due to the lump sum

You commutated part of your CS pension at a rate of 12:1? Most people on this forum would have advised against that, it's a terrible rate unless you've got Gordon The Leg-Breaker banging on the door demanding you settle your gambling debts.

Slippers1 said:

... I was not given the option of contracting in or out. 

You were given the choice of contracting out and joining the CS pension scheme, or not. I think everyone here would agree that you made the correct choice.

dunstonh

Slippers1 said:

Hello thanks for replying. I cannot pay any additional sums to boost state pension as too late! COPE amount on government gateway shows £44.64 all I wanted to know from my pension provider if this is on top of my civil service pension. When I was made redundant I took a lump sum as it was Covid and unfortunately I haven't been able to work since, so my works pension is less due to the lump sum, paid less NI but unfortunately I was not given the option of contracting in or out. 

Whilst a member of that occupational pension, you paid lower NI in exchange for the defined benefit scheme to pay you the pension benefits instead.    It cannot be worked out on a £1 for £1 basis but needless to say, you were financially better off because of it.

xylophone

I cannot pay any additional sums to boost state pension as too late!

How many qualifying years did you have pre 6/4/16?

And from then up to when you retired from paid employment?

You reached SPA this month?

What is your weekly SP?