How do I contract out of S2P?

soon_broke

Hi
I see lots of advice about contracting back in to serps or s2p but nobody can tell me how to do it! It is only now, 10 days before my 65th birthday that I even realised that I was contracted out ( I was in the teachers pension scheme which was contracted out) I retired on health grounds in 1991 and since then I have been on invalidity benefit with a rather small teachers pension as well. I have been told that, although I received additional invalidity benefit for SERPS I will receive none for my pension, also no state second pension. Help my weekly income will go from £110 to £58 ( I do not have sufficient contributions, only 66%)
I dont know if opting back in to S2P will do any good but I do know that I have only got 10 days to do so. If anyone knows how to do it please help>
Thanks

dunstonh

The final salary pension scheme contracting out is different to contracting out with a personal pension. In the case of the occ scheme you had no choice. If you havent been working since 1991 you are not contracted out any more.

soon_broke

dunstonh wrote: »

The final salary pension scheme contracting out is different to contracting out with a personal pension. In the case of the occ scheme you had no choice. If you havent been working since 1991 you are not contracted out any more.

Does that mean I will be entitled to any S2P for the time I was on long term incapacity/invalidity. There seems to be conflicting advice about this, some of the gov leaflets state that the 2nd state pension is for people on long term sickness but the pensions advisery servise said tht only contibutions for the basic state pension were paid when one was on long term incapatity.

Is the pensions roundabout complicted!!!
Thanks for your help

seven-day-weekend

AFAIK, it has only been recently that credits have been made towards S2P by Incapacity Benefit.

You may be eligible to claim Pension Credit if your income is low -see this link:

http://www.thepensionservice.gov.uk/pensioncredit/

EdInvestor

Help my weekly income will go from £110 to £58 ( I do not have sufficient contributions, only 66%)

You should be entitled to pension credit so your income will go up to around 127 a week. See your CAB for help, as men over 60 are entitled to pension credit - it sounds as though you have been underpaid.

soon_broke

EdInvestor wrote: »

You should be entitled to pension credit so your income will go up to around 127 a week. See your CAB for help, as men over 60 are entitled to pension credit - it sounds as though you have been underpaid.

Unfortunately (or in the circumstances fortunately) we have some savings as we sold out house and are renting while we look for somewhere. This is classed as savings so we will not be eligible for pension credit. It looks like those savings will soon go down!
I am waiting for a call back from the pensions service to explain more about the S2P as there is so much conflicting advice.
I will keep you posted if they do phone back.
Thanks for all your help and if you think of anything which might help me increase this pension I would be grateful.
cheers

seven-day-weekend

I have a feeling that savings can be set aside for means-test purposes if they are earmarked for buying a home - I think for six months. May be worth asking about?

soon_broke

seven-day-weekend wrote: »

I have a feeling that savings can be set aside for means-test purposes if they are earmarked for buying a home - I think for six months. May be worth asking about?

Thanks, I will check that out

EdInvestor

Have you been credited with NI conts for the basic state pension while on invalidity benefit?If so then it seems there is little that can be done (S2P is not relevant to your situation).If you haven't been credited then you can pay up to 10 years of voluntary class 3 NICs, which would help quite a lot in boosting your state pension.

soon_broke

EdInvestor wrote: »

Have you been credited with NI conts for the basic state pension while on invalidity benefit?If so then it seems there is little that can be done (S2P is not relevant to your situation).If you haven't been credited then you can pay up to 10 years of voluntary class 3 NICs, which would help quite a lot in boosting your state pension.

Yes I have been credited with NI contributions for the basic pension, however I do not understand why S2P is not relevant, according to the literature from the pensions service "You can build up your entitlement to a state second pension if you are not working ....and throughout a complete tax year you are entitled to long term incapacity benefit..." However the people deciding the level of my pension do not seem want to take that into account!

Paul_Varjak

soon_broke wrote: »

Yes I have been credited with NI contributions for the basic pension, however I do not understand why S2P is not relevant, according to the literature from the pensions service "You can build up your entitlement to a state second pension if you are not working ....and throughout a complete tax year you are entitled to long term incapacity benefit..." However the people deciding the level of my pension do not seem want to take that into account!

I think you had better tell the Pension Service about the LABOUR MARKET ATTACHMENT TEST. This will apply if you have been on Incapacity Benefit since 6th April 2002 (When S2P was introduced).

10% of your working life since 1978 (when SERPS was introduced) must have qualified for basic state pension using class 1 National Insurance contibutions you have paid yourself. (Class 1 contributions are not paid by self-employed).

If you qualify under the test you will get S2P at the rate of £1 per week for every full tax year since 6th April 2002 that you have been on Incapacity Benefit. In your case that would seem to equate to £5 per week S2P. So, I guess, you will need to top up with Pension Credit.