Transfer or opt back in? - Contracted out pension

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
2 replies 751 views
centaurandrewcentaurandrew Forumite
60 Posts
Hi there,

After a short period (under 12 months) of employment with a company - I accrued approximately £4K worth of pension contributions in a contracted out scheme.

The scheme of my new employer will not accept transfers from a contracted out scheme - and my old employer will not allow me to keep my contributions in their scheme.

They have given me a deadline and said if the pension is not transferred - it will be paid back to the government and I will be contracted back in to the state second pension scheme.

I appreciate that the answer to this may be entirely dependent on how beneficial a new scheme might be - but should I now look for a private scheme to transfer that £4K of contributions to - or generally speaking will I have a good deal if contracted back in?

Any advice gratefully received.



  • xylophonexylophone Forumite
    38.6K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Contracting out has ended for DC schemes and will end for DB Schemes.

    Presumably your old pension was in a DB Scheme which is why you are having difficulty with the transfer?

    Under the circumstances, where you have no option but to transfer out, HL might be prepared to accept the transfer into a SIPP without insisting on an IFA sign off?

    I seem to remember that they did agree to this for another poster.

    You could give them a ring?
  • jamesdjamesd Forumite
    25.3K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    You will not get a good deal from being contracted back in for that time, you will get nothing, assuming you retire after the flat rate state pension comes in and will easily work more than 35 years in total. That's because the state pension is capped at the flat rate level and you get nothing for any years worked beyond the point where you get that. So the choice is typically contracted out pot plus flu flat rate or just full flat rate.

    xylophone is right that Hargreaves Lansdown tends to be helpful in situations like this.
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