mystery of pensions

mgdavid wrote: »

Employer or private pensions do not affect State Pension directly, however if you were a member of an employer's Contracted out scheme you would have paid lower NI contributions and 'earned' less SP for the duration.

mgdavid, I think you are overlooking or have forgotten the fact that tens of thousands of us have a much reduced State Pension forecast because we were encouraged by HMG to take out standalone personal pensions purely as containers for rebated NI contributions for SERPs?

Those standalone policies for most people were started because a financial adviser way back said it was a no brainer, and their purpose was never properly explained by the adviser (who was usually there to explain an occupational pension scheme offered by his or her client, the policyholder's employer). Nor then was the purpose understood by most policyholders. Consequently many have long been transferred or even cashed and spent, long before State Pension age and the ultimate providers and current day advisers involved in such transfers and cashings-in have largely not explained the original purpose or likely effect either.

I have one with a current transfer value of £60K, and not once has the provider offered any caution about a lower State Pension when providing a Transfer Quote or (early) retirement quote. Current day staff have little idea of the history of their company's product offerings. That's especially because their company has done their best to tip all the diverse products over decades into the same bland wrappers.

I would be foolish to try to cash my £60K now if I didn't realise that having that policy has reduced my SP forecast significantly. I do realise it. Most policyholders haven't a clue and some have just spent it like some unexpected windfall at age 55 or even I think at age 50 perhaps until a few years ago?

And bearing in mind what xylophone has just posted, it is perhaps even more surprising that last year a Pension Transfer Specialist at a major SIPP provider told me that this particular policy did not require specialist advice to be transferred into a SIPP (thereby losing any GMP rights it contains?). The same transfer specialist of course did tell me I'd have to receive specialist advice if I wanted to transfer my contracted out DB scheme. Yet another clue that the GMP rights in the standalone private pension SERPs policies have never been taken seriously enough?