This is confusing...

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
4 replies 2.5K views
amc1amc1 Forumite
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When my wife started working in 1989 she contracted out of SERPS (S2P) with a personal pension from the Royal London.

When she started working for Marks & Spencer in 1996 she joined their company pension scheme (also contracted out) and the annual statements we received from Royal London showed no contributions (which you would expect).

When she joined Sainsburys in 2002 she joined their Stakeholder pension plan. Suddenly, the Royal London statements now show contributions again. As far as we can remember we have never been asked whether the contracted out S2P payments should go into the Sainsburys Stakeholder plan or the Royal London one.....

We're not talking big sums of money here but it would be nice to know what's going on.

My questions are therefore as follows :-

How has this likely to have happened ? What is the process.
Would it be better to send the contracted out S2P payments to the Stakeholder pension plan ?
Would it better to contract back in ? (my wife is low-paid and is 32)
What should we do now ?

Many thanks for any assistance, Regards, Andy

Replies

  • dunstonhdunstonh Forumite
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    Fairly easy one here.  Avoiding some of the technical aspects, her NI number would have her showing as contracted out.   This hasnt been revoked by Royal London or herself so it just sat dormant whilst she was employed by M&S.  The M&S is contracted out but not in the same way as the employment she had when contributing to the Royal London scheme originally or now under Sainsburys.  This is because the M&S scheme is an occupational scheme.  The Sainsburys scheme is just a personal pension with contributions from the payslip and not direct debit.  

    So, Royal London stopped receiving the rebates whilst she was at M&S but they would have started up again automatically under Sainsburys.  This is totally normal.

    With regards to contracting out advice, you cant get specific advice on here as that would lead to a potential breach of the FSA guidelines but take a look at the thread in this section regarding contracting out (about a week ago) and it gives lots of information.   I would guess (note the word guess, not advise) , that she should contract back in as currently the vast majority of people should be contracted in.   This can be done by contacting Royal London and the should send the appropriate CA form.

    Transferring the Royal London scheme is something you need to discuss with an IFA as it depends on a number of issues and requires some research.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • PalPal Forumite
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    I'll advise if you like! ;D Your wife should contract back in.
  • dunstonhdunstonh Forumite
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    Im always a little cautious since some idiot wrote to the PIA (as is was then) and gave a breakdown of copy and pastes of what i had posted. The PIA didnt log it as a complaint but just passed it on but I did have to make a response. As it happened, it was selective copy and pastes, had a bunch of other peoples comments and was generic so there was no basis or problem.

    However, since then I have toned down my responses when answering specific questions.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • PalPal Forumite
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    Unlucky mate! That is why I keep my real name and employer out of these boards. All I give here are opinions. I am never advising in any capacity as an IFA.
This discussion has been closed.
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