What was SERPS and where did my pension contributions go to?

xylophone

  

It'll be poor John Thomas next.......

Not to mention Willie Wonka.......

michaels

Linton said:

Omichaels said:

xylophone said:

The government confiscated your serps and s2p payments when they changed the pension rules.

OP, accurate information re New State Pension  which was introduced 6/4/16 - full NSP was £155.65 at inception.

https://assets.publishing.service.gov.uk/media/5a7a21fd40f0b66a2fc00201/single-tier-pension-fact-sheet.pdf

 Guide produced by the government to explain it to the general public.

TLDR - if you had accrued serps / s2p to take you to the level of the new state pension then you were left in the position where any further NI you paid accrued you precisely nothing whereas if you had instead previously opted out you would have a nice DC pot and then be able to earn the rest of a full state pension via your future NI payments.

!!!!!! Turpin wore a mask.

Wrong.  If you had accrued more than the new standard SP prior to 2016, you kept it.

Secondly, the transfer from the old basic pension to the new standard pension was said to be cost neutral. So those with higher wages lost the opportunity to raise their SP to very high levels whereas the lowest paid gained. More Robin Hood than Richard Turpin.

So perhaps they should have reclaimed the opted out money if it was merely an attempt to grab the pension entitlement that those who had paid extra NI had been told they were accruing?

Not rocket science, NI above a certain level I had the choice of investing into SERPS/S2P or a contracted out pot.  I chose the former and had the accrued pension that I was promised effectively removed.

Cobbler_tone

I’m surprised the opting out of SERPS hasn’t been an area that has been revisited.
As an unsuspecting 17 year old I was pretty much told to sign something that a guy my small employer brought in from RSA thrust in front of me. Pre internet….and I was 17 so you can imagine.
Ultimately it ended up giving me £20k (my first pension) that I transferred into my only DC pension today, after getting an annual statement for 30+ years.
I know my father-in-law gets £1,600 a month state pension, plus a modest private pension. 

michaels

Cobbler_tone said:

I’m surprised the opting out of SERPS hasn’t been an area that has been revisited.
As an unsuspecting 17 year old I was pretty much told to sign something that a guy my small employer brought in from RSA thrust in front of me. Pre internet….and I was 17 so you can imagine.
Ultimately it ended up giving me £20k (my first pension) that I transferred into my only DC pension today, after getting an annual statement for 30+ years.
I know my father-in-law gets £1,600 a month state pension, plus a modest private pension. 

Congratulations - that is 20k you probably wouldn't have at all if you had not opted out

Linton

michaels said:

Linton said:

Omichaels said:

xylophone said:

The government confiscated your serps and s2p payments when they changed the pension rules.

OP, accurate information re New State Pension  which was introduced 6/4/16 - full NSP was £155.65 at inception.

https://assets.publishing.service.gov.uk/media/5a7a21fd40f0b66a2fc00201/single-tier-pension-fact-sheet.pdf

 Guide produced by the government to explain it to the general public.

TLDR - if you had accrued serps / s2p to take you to the level of the new state pension then you were left in the position where any further NI you paid accrued you precisely nothing whereas if you had instead previously opted out you would have a nice DC pot and then be able to earn the rest of a full state pension via your future NI payments.

!!!!!! Turpin wore a mask.

Wrong.  If you had accrued more than the new standard SP prior to 2016, you kept it.

Secondly, the transfer from the old basic pension to the new standard pension was said to be cost neutral. So those with higher wages lost the opportunity to raise their SP to very high levels whereas the lowest paid gained. More Robin Hood than Richard Turpin.

So perhaps they should have reclaimed the opted out money if it was merely an attempt to grab the pension entitlement that those who had paid extra NI had been told they were accruing?

Not rocket science, NI above a certain level I had the choice of investing into SERPS/S2P or a contracted out pot.  I chose the former and had the accrued pension that I was promised effectively removed.

From my understanding SP is accrued each year uprated by the general SP factors. Nothing you had already accrued for was removed.  In April 2016 the calculations were made under the old and new rules and the higher of the two was used going forward, So if anything you gained.

What you lost out on was what you may have thought you would accrue in the future which is a rather different matter. No rules are fixed permanently for the indefinite future.

michaels

Linton said:

michaels said:

Linton said:

Omichaels said:

xylophone said:

The government confiscated your serps and s2p payments when they changed the pension rules.

OP, accurate information re New State Pension  which was introduced 6/4/16 - full NSP was £155.65 at inception.

https://assets.publishing.service.gov.uk/media/5a7a21fd40f0b66a2fc00201/single-tier-pension-fact-sheet.pdf

 Guide produced by the government to explain it to the general public.

TLDR - if you had accrued serps / s2p to take you to the level of the new state pension then you were left in the position where any further NI you paid accrued you precisely nothing whereas if you had instead previously opted out you would have a nice DC pot and then be able to earn the rest of a full state pension via your future NI payments.

!!!!!! Turpin wore a mask.

Wrong.  If you had accrued more than the new standard SP prior to 2016, you kept it.

Secondly, the transfer from the old basic pension to the new standard pension was said to be cost neutral. So those with higher wages lost the opportunity to raise their SP to very high levels whereas the lowest paid gained. More Robin Hood than Richard Turpin.

So perhaps they should have reclaimed the opted out money if it was merely an attempt to grab the pension entitlement that those who had paid extra NI had been told they were accruing?

Not rocket science, NI above a certain level I had the choice of investing into SERPS/S2P or a contracted out pot.  I chose the former and had the accrued pension that I was promised effectively removed.

From my understanding SP is accrued each year uprated by the general SP factors. Nothing you had already accrued for was removed.  In April 2016 the calculations were made under the old and new rules and the higher of the two was used going forward, So if anything you gained.

What you lost out on was what you may have thought you would accrue in the future which is a rather different matter. No rules are fixed permanently for the indefinite future.

Nope - that could have been achieved easily by freezing what I had accrued when the change happened as a SERPS amount and a state pension amount.  I would not have yet reached enough contributions for full state pension but would have done so with future years contributions.  I would then have had my supposedly accrued SERPS on top of whatever state pension I eventually wound up with.

As above, had I opted out I would still have the money invested in extra pension.  Not opting out I instead had the accrued pension removed.

Cobbler_tone

michaels said:

Cobbler_tone said:

I’m surprised the opting out of SERPS hasn’t been an area that has been revisited.
As an unsuspecting 17 year old I was pretty much told to sign something that a guy my small employer brought in from RSA thrust in front of me. Pre internet….and I was 17 so you can imagine.
Ultimately it ended up giving me £20k (my first pension) that I transferred into my only DC pension today, after getting an annual statement for 30+ years.
I know my father-in-law gets £1,600 a month state pension, plus a modest private pension. 

Congratulations - that is 20k you probably wouldn't have at all if you had not opted out

More by luck than judgement 

Triumph13

michaels said:

Linton said:

michaels said:

Linton said:

Omichaels said:

xylophone said:

The government confiscated your serps and s2p payments when they changed the pension rules.

OP, accurate information re New State Pension  which was introduced 6/4/16 - full NSP was £155.65 at inception.

https://assets.publishing.service.gov.uk/media/5a7a21fd40f0b66a2fc00201/single-tier-pension-fact-sheet.pdf

 Guide produced by the government to explain it to the general public.

TLDR - if you had accrued serps / s2p to take you to the level of the new state pension then you were left in the position where any further NI you paid accrued you precisely nothing whereas if you had instead previously opted out you would have a nice DC pot and then be able to earn the rest of a full state pension via your future NI payments.

!!!!!! Turpin wore a mask.

Wrong.  If you had accrued more than the new standard SP prior to 2016, you kept it.

Secondly, the transfer from the old basic pension to the new standard pension was said to be cost neutral. So those with higher wages lost the opportunity to raise their SP to very high levels whereas the lowest paid gained. More Robin Hood than Richard Turpin.

So perhaps they should have reclaimed the opted out money if it was merely an attempt to grab the pension entitlement that those who had paid extra NI had been told they were accruing?

Not rocket science, NI above a certain level I had the choice of investing into SERPS/S2P or a contracted out pot.  I chose the former and had the accrued pension that I was promised effectively removed.

From my understanding SP is accrued each year uprated by the general SP factors. Nothing you had already accrued for was removed.  In April 2016 the calculations were made under the old and new rules and the higher of the two was used going forward, So if anything you gained.

What you lost out on was what you may have thought you would accrue in the future which is a rather different matter. No rules are fixed permanently for the indefinite future.

Nope - that could have been achieved easily by freezing what I had accrued when the change happened as a SERPS amount and a state pension amount.  I would not have yet reached enough contributions for full state pension but would have done so with future years contributions.  I would then have had my supposedly accrued SERPS on top of whatever state pension I eventually wound up with.

As above, had I opted out I would still have the money invested in extra pension.  Not opting out I instead had the accrued pension removed.

Only to the extent that the accrued pension exceeded the difference between full old and full new pensions.  If your accrued pension was less than that, then you actually got an increase.  Yes, others did better, and yes you might have done better if you had opted out if you do end up working enough post 2016 years.

michaels

Triumph13 said:

michaels said:

Linton said:

michaels said:

Linton said:

Omichaels said:

xylophone said:

The government confiscated your serps and s2p payments when they changed the pension rules.

OP, accurate information re New State Pension  which was introduced 6/4/16 - full NSP was £155.65 at inception.

https://assets.publishing.service.gov.uk/media/5a7a21fd40f0b66a2fc00201/single-tier-pension-fact-sheet.pdf

 Guide produced by the government to explain it to the general public.

TLDR - if you had accrued serps / s2p to take you to the level of the new state pension then you were left in the position where any further NI you paid accrued you precisely nothing whereas if you had instead previously opted out you would have a nice DC pot and then be able to earn the rest of a full state pension via your future NI payments.

!!!!!! Turpin wore a mask.

Wrong.  If you had accrued more than the new standard SP prior to 2016, you kept it.

Secondly, the transfer from the old basic pension to the new standard pension was said to be cost neutral. So those with higher wages lost the opportunity to raise their SP to very high levels whereas the lowest paid gained. More Robin Hood than Richard Turpin.

So perhaps they should have reclaimed the opted out money if it was merely an attempt to grab the pension entitlement that those who had paid extra NI had been told they were accruing?

Not rocket science, NI above a certain level I had the choice of investing into SERPS/S2P or a contracted out pot.  I chose the former and had the accrued pension that I was promised effectively removed.

From my understanding SP is accrued each year uprated by the general SP factors. Nothing you had already accrued for was removed.  In April 2016 the calculations were made under the old and new rules and the higher of the two was used going forward, So if anything you gained.

What you lost out on was what you may have thought you would accrue in the future which is a rather different matter. No rules are fixed permanently for the indefinite future.

Nope - that could have been achieved easily by freezing what I had accrued when the change happened as a SERPS amount and a state pension amount.  I would not have yet reached enough contributions for full state pension but would have done so with future years contributions.  I would then have had my supposedly accrued SERPS on top of whatever state pension I eventually wound up with.

As above, had I opted out I would still have the money invested in extra pension.  Not opting out I instead had the accrued pension removed.

Only to the extent that the accrued pension exceeded the difference between full old and full new pensions.  If your accrued pension was less than that, then you actually got an increase.  Yes, others did better, and yes you might have done better if you had opted out if you do end up working enough post 2016 years.

Think you mean the other way around, if you were above new state pension you got to keep the excess but had everything below that clawed back each extra year you then worked.

Fair would have been you keep your SERPS/S2P accruals and state pension level accrued at he switch over date, then earn more state pension based on any further contributions - what effectively happened for those who had opted out.

GunJack

However you look at it, there was and is a max state pension under new and old schemes. You sound like your 2016 starting amount was probably based on the "old" system so you have not lost out on anything, whatever that amount was you got even if it was over the max new sp. Whatever pension scheme you've in since contracting out stopped is on top of that and probably worth more than the serps you could not have accrued in the same time...

No one started new sp worse off than what they had accrued under the old system