Opting out of serps

Wolfy197216

Help needed.

Back in 1990 i opted out of SERPS when i was 18 i appreciate this scheme has since ended back in 2012 and I've automatically been enrolled.

I'm now 53 and i was looking into my pension situation i can see my opted out pension with the company who took the funds and that is expected to be about £4500 per year (about 380 a month). 

But my query is i've logged on to the Gov.uk site to see what state pension i'm entitled too and it says i'm entitled to almost the full amount as i've been making contributions to it from my National insurance for the last 34 years.   I'm confused as i thought my national insurance contributions between 1990 and 2012 were going to this private pension.

I've spoken to my private pension provider and they have advised me to contact HMRC as they couldn't advise further.

Would anyone be able to clarify this for me?

Baldytyke88

I will receive the full state pension and I opted out, as you were. No problems here.

We pay NI longer than needed, I am 63 and my state pension is fully paid up.

Wolfy197216

ah ok so the GOV site is correct that Baldytyke88 i just thought it was odd that it's saying i paid into it for the last 36 years but knew full well that 26 of them were into the private pension.

QrizB

Wolfy197216 said:

I'm confused as i thought my national insurance contributions between 1990 and 2012 were going to this private pension.

When you were checking your payslips from 1990 to 2012 you'll have seen that you were still paying NI, albeit at a lower rate than you would otherwise have done. Contracting-out of SERPS reduced your NI bill but you were still paying enough to qualify for the basic state pension.

So yes, those years will count towards your state pension when you come to retire in 14 years or so.

flaneurs_lobster

Wolfy197216 said:

ah ok so the GOV site is correct that Baldytyke88 i just thought it was odd that it's saying i paid into it for the last 36 years but knew full well that 26 of them were into the private pension.

You would have been paying NI during those SERPS opt-out years, just at a reduced rate.

Wolfy197216

QrizB said:

Wolfy197216 said:

I'm confused as i thought my national insurance contributions between 1990 and 2012 were going to this private pension.

When you were checking your payslips from 1990 to 2012 you'll have seen that you were still paying NI, albeit at a lower rate than you would otherwise have done. Contracting-out of SERPS reduced your NI bill but you were still paying enough to qualify for the basic state pension.

So yes, those years will count towards your state pension when you come to retire in 14 years or so.

ah loooked at my payslips but can't find many prior to 2005 but because my wage fluctuated quite a bit due to overtime / bonus etc i was unable to determine if my NI figure was less than it should have been.

NoMore

You were opted out of serps which was an extra state pension system. You were still in the main state pension system and although paying less ni still building entitlement to this. 

In 2016 when the new basic state pension was introduced , this entitlement was used to calculate your starting amount for it. This is what has given your current new state pension projection. 

WitsEnd101

QrizB said:

Wolfy197216 said:

I'm confused as i thought my national insurance contributions between 1990 and 2012 were going to this private pension.

When you were checking your payslips from 1990 to 2012 you'll have seen that you were still paying NI, albeit at a lower rate than you would otherwise have done. Contracting-out of SERPS reduced your NI bill but you were still paying enough to qualify for the basic state pension.

So yes, those years will count towards your state pension when you come to retire in 14 years or so.

I'm in a similar boat. Does that mean that if I had decided not to opt out of serps, I would now be in worse position as I would not have built up that additional private pension?

I am also qualified for the full SP.

Wolfy197216

Thanks all for your comments this has really been appreciated, thankfully now i don't have to waste time calling HMRC.

Thanks again 

Wolfy197216

WitsEnd101 said:

QrizB said:

Wolfy197216 said:

I'm confused as i thought my national insurance contributions between 1990 and 2012 were going to this private pension.

When you were checking your payslips from 1990 to 2012 you'll have seen that you were still paying NI, albeit at a lower rate than you would otherwise have done. Contracting-out of SERPS reduced your NI bill but you were still paying enough to qualify for the basic state pension.

So yes, those years will count towards your state pension when you come to retire in 14 years or so.

I'm in a similar boat. Does that mean that if I had decided not to opt out of serps, I would now be in worse position as I would not have built up that additional private pension?

I am also qualified for the full SP.

i do think thats the case witsend101 as we have still qualified for full state pension of £230 providing i do another year of work account to the GOV site plus we have this money in the private pension too.

WitsEnd101

So, are the people who didn't opt out now kicking themselves or do they get additional SP to compensate?