Pension advice needed please (SERPs)

Pompeyfan

I'm currently 59 (my pension age is 67) and don't have any private pensions, but I did opt out of SERPs in 1988 after advice and not knowing much about it at the time (even though I did tell the agent my job wasn't full-time nor permanent at that time), and over the years till SERPs was ended I was in and out of low paid work till I finally had to stop working due to illness and disability (I am currently on UC and PIP) and am now virtually housebound (although i do at least own my own home). I checked with the DWP about what my state pension will be and if I had any missing NI contributions years and was told £182pw and no missing years.

Recently I had a statement about my SERPs telling me what I can expect, the pot is about £1,000 and will pay about £93 per year, what I'd like to know is if it can be cashed in and if so would it be worth it? and would leaving it as is affect getting pension credits? Could it be used to boost my pension to the £221pw maximum.

Cheers 

molerat

Have you actually had an on line pension forecast ?

You may be one of those cases where boosting the state pension would be a waste as pension credit would increase whatever you get plus open the door to other benefits.  That small pension would not have much effect but taking it as cash, provided you have limited other savings, would have even less effect.

Pompeyfan

Thanks for the reply.

Yes, although not online, I had to ring them as I couldn't set up an online account as I don't have a passport or PhotoID driving licence to prove my identity. 

They said I'd get the £185pw full pension, there are no NI years missing, and I have the full 40 years.

I don't have much savings and am well under the £6,000 UC limit, but taking it as cash would allow me to do some decorating.

p00hsticks

Pompeyfan said:

They said I'd get the £185pw full pension, there are no NI years missing, and I have the full 40 years.

That doesn't really make much sense.
The 'full' new State Pension is currently £221.20, not £185.

 The number of years you need to get there varies from person to person depending on your individual record. If you remain on UC from now until you reach State Pension Age you should accumulate enough additional years going forward from the associated NI credits to take you to (or very close to) the maximum.
 
 I think that there is a problem at present with the credits associated with UC showing up on peoples NI records, but that DWP/HMRC are aware of the issue and are attempting to address it.

Pompeyfan

Yeah, I didn't understand why it is £185 and not £221 as Martin said on TV recently, so I'm going to ring again as last time was the end of January 2023.  I've only been on UC since October, but I was registered on ESA for NI contributions only before that.

Dazed_and_C0nfused

Pompeyfan said:

Yeah, I didn't understand why it is £185 and not £221 as Martin said on TV recently, so I'm going to ring again as last time was the end of January 2023.  I've only been on UC since October, but I was registered on ESA for NI contributions only before that.

You are comparing apples and pears.

The standard new State Pension today (March 2025) is £221.20/week

The standard new State Pension in March 2023 was £185.15

So chances are you are entitled to £221.20/week (or very close to that).  But you are comparing that with a rate from a completely different tax year.

p00hsticks

Pompeyfan said:

Yeah, I didn't understand why it is £185 and not £221 as Martin said on TV recently, so I'm going to ring again as last time was the end of January 2023.  I've only been on UC since October, but I was registered on ESA for NI contributions only before that.

No need to waste your time and theirs ringing again - as Dazed_and_Confused says, if it was back in early 2023 that they gave you those figures that explains it. 

Pompeyfan

Cheers for all the advice and information, I may as well cash out the £1,000 then as I could do with it.

Albermarle

Pompeyfan said:

Cheers for all the advice and information, I may as well cash out the £1,000 then as I could do with it.

25% will be tax free and 75% taxable .
Even though you are a non taxpayer, the pension provider will most likely take some automatically. If so you can claim it back. Or it will be refunded at some point in the future even if you do not do anything.

Dazed_and_C0nfused

Albermarle said:

Pompeyfan said:

Cheers for all the advice and information, I may as well cash out the £1,000 then as I could do with it.

25% will be tax free and 75% taxable .
Even though you are a non taxpayer, the pension provider will most likely take some automatically. If so you can claim it back. Or it will be refunded at some point in the future even if you do not do anything.

As it is only £1,000 the emergency code would mean no tax was deducted from the taxable element.

However if the op opted to take this as a "small pot", to avoid future MPAA issues, then 20% tax would be deducted and eventually refunded (of not actually due).