Letter from IR, what does it mean?

KLB

I’ve had a letter from the Inland Revenue and I don’t know what it means. Basically, I had a company pension which I stopped paying into in 1997 I think. Also I moved house back then so they never had my new address until I contacted them a few months ago. Now I’ve had this letter from the IR…

We are sending you this form because our records show that you have been a member of the following pension scheme since 1997… I have recently received a notification cancelling the authority to pay minimum contributions to this scheme with effect from 05/04/07.

What happens now
I will stop payment of minimum contributions to this scheme in respect of earnings after 05/04/07. If any further minimum contributions become payable in respect of the period 06/04/97 – 05/04/07 we will pay these to the above scheme unless you are transferring your protected rights to a new pension scheme, in which case we can pay the minimum contributions to that new scheme.

Can anyone translate this into something I might understand!? Have the IR been paying my NI into this scheme the whole time. I’m pretty sure that I checked years ago and was told that I was contracted into serps which I thought meant that my NI was being paid toward my state pension. Or is that nothing to do with this at all?

As you can tell I’m not financially minded and just don’t get this pension malarkey at all! Thanks for your help!

jonathon_hart

It would appear they have been paying them somewhere - did you set up a personal pension to contract out with? I take it there is no scheme name on the letter. If so could you phone any helpline number on there and ask the name of the scheme these have been paid to.

KLB

Yes sorry I didn't make it clear, the scheme name is on the letter and it is the old pension I used to have. But if I remember a phone conversation I had years ago with the provider, they told me that I was contracted in. So I'm not sure why they've been paying into this scheme.

Am I better or worse off with them pay it into this scheme rather than into the state pension, or doesn't it make a difference?

Going on what it says in the letter, am I now contracted back in?

Retired_I.F.A.

It's a personal pension plan to which you had contacted out of serps with and up to 4/4/07 apparently you still were having the NI rebates paid into.

DAZ1974

Hi, I recieved same letter and thus contacted my Pension provider, I have not paid into the Pension for over 10 years, I was supprised when they told me how much was in there but thats neither here or there, they didn`t have my address so put me down as "address unknown".
They explained what that letter was about and basicaly when i took pension out in 1997 they thought it was best to contract out of serps as it was known then, they now believe that its better to be contracted into serps so have contracted everyone with a pension back in.
That is what they explained to me and i am just passing it on, I am not a financial expert and was as confused as you.
Hope that helps

Daz

whu

I am no expert either but from what I understand if you contracted out and have now reached 44 they write to you asking if you want to contract back in as they think this is best now as DAZ says