Any pension advisers on line

[PaulB]

At the age of 47 iv'e just found out i signed out of SERPE when i was 18 to a Liverpool Victoria sales man who used to collect from my old mother when i was 17. i cannot remember doing this and mother never forwarded on the LV statements, i left home at 18 and have paid into the NHS pension for the last 20 years.
is my SERPS in safe hand?, was this the right thing to do at the time or was i miss sold??

yours
worried man

Get a personal financial advisor. Money expert Martin Lewis advises this to EVERYone as a matter of urgency and like all financial stuff, the sooner you do it the better.

It's expensive to set up but the benefits are extraordinary. Having taken the plunge several years ago continues to be the best thing I ever did to secure my financial future. I get a comparison showing where I would have been had I stayed where I was (6 different pension pots and savings with laughable interest rates that were actually costing me) and where I am now and the set up costs can now be seen as a real investment.

 

[alicat]

[QUOTEMy understanding was SERPS gave the potential for an increased state pension and therefore opting out of it would/should leave one eligible for a full state pension. I opted out in my mid 20s and retired at 62 having worked since 18. I’m 64 now and my projection from HMRC shows I will receive the full pension.
QUOTE]

That relates to the system in place prior to the New State Pension. I opted out of SERPS and have a reduced entitlement under the new system, which is slowly improving with each year's NI contributions.

 

[gbb]

This one is interesting. A couple years ago I got a pension update and it stated I'd get basic state pension plus around the same amount again because I was...was in SERPs for some years.
I think I stopped paying SERPs when I changed jobs, it was one of those things I didn't realise until a long time after...perhaps that was when they stopped it anyway.
I really need to get another update to confirm the projections.

Co-incidentally, I stayed in SERPS long after they recommended you opt out...youd be better off they said. I seem to remember some years ago an article that calculated you'd have actually been better off staying in it, but that may have been a time of low returns and private pensions were taking a hammering.

 

[Flying Dodo]

At the age of 47 iv'e just found out i signed out of SERPE when i was 18 to a Liverpool Victoria sales man who used to collect from my old mother when i was 17. i cannot remember doing this and mother never forwarded on the LV statements, i left home at 18 and have paid into the NHS pension for the last 20 years.
is my SERPS in safe hand?, was this the right thing to do at the time or was i miss sold??

yours
worried man

Contracting out of SERPS (which then became known as S2P - State Second Pension) meant that some of your NI contributions were paid by the DWP once a year across to a pension provider. An individual then ceased to accrue that additional State pension, and whatever the rebated NI contributions paid into the personal pension grew by, would then be used to provide a pension.

You completing that form to opt-out of SERPS wouldn't have done anything, as employees in the NHS scheme (1995 and 2008 sections) and the new 2015 scheme paid a lower rate of NI contributions anyway, to reflect the fact that the NHS pension schemes were already contracted out as the benefit included an amount called Guaranteed Minimum Pension (GMP) which was roughly equivalent to the pension that people would normally be accruing under SERPS anyway.

By being in a contracted employer's scheme, it meant there wasn't any rebated NI contributions available to contract out with a personal pension.

From 2016 that was changed as contracting-out was stopped, so NHS employees NI contributions went up, as everyone started paying standard Class A NI rates.

In the past as an IFA, I've come across loads of empty personal pension policies that people have had, simply because they were persuaded to fill in an opt-out form, but as they were already paying the lower Class D contracted out NI contributions, there wasn't any amount which could be transferred to the pension provider.

Is there any money actually in the LV policy?

 

[Flying Dodo]

I’m not in a position to argue the point with those who have a reduced or expect a reduced pension following opting out of SERPS.

My understanding was SERPS gave the potential for an increased state pension and therefore opting out of it would/should leave one eligible for a full state pension. I opted out in my mid 20s and retired at 62 having worked since 18. I’m 64 now and my projection from HMRC shows I will receive the full pension.

I think there are other reasons why people do not get the full pension such as part time working, maternity leave, self employed etc. but my understanding is anyone in PAYE with a full qualifying NI record will receive the full pension.

Not necessarily the case. State pension used to consist of 2 elements, the basic old age pension and an earnings related element called SERPS or S2P. People used to be allowed to opt out of SERPS. To get the basic old age pension , as stated above you had to have paid enough NI contributions.

From 2016, they rolled both elements together into the new State pension. If someone has paid NI or received credits for at least 35 years, then they'll get the full State pension. Where it gets very messy is for people who have opted out of SERPS/S2P in the past, and the interaction with the new State pension to be paid to anyone retiring after 6th April 2016. If by the time someone gets to State Pension Age they have paid/received credit for 35 years at the full (non contracted out) rate, then they will qualify for the full amount of the State pension - currently £164.35 per week for the 2017/18 tax year.

If as a result of opting out of SERPS/S2P in the past you don't have those 35 years, then your State pension will be reduced.

 

[Edgy Dee]

That's the Basic State Pension, the New State Pension which applies to those retiring in the future requires 35 years NI contributions but pays a higher weekly amount.
https://www.gov.uk/new-state-pension

I used to work as a pensions adviser. Your NHS pension will be worth a lot more than your serps would ever have been, but as quoted, that's probably irrelevant now. Looks like you are young enough to qualify for the full new state pension under which serps/S2P is dead and gone. But to put your mind at rest, you can get a state pension forecast at any age, and it costs you nothing, so go for that. Also, yes, do contact LV to enquire about any benefits they might still hold for you.

 

[tony111]

I think you've been miss sold a pension by LV. I worked for the NHS and enquired about moving the pension to another provider. My advisor rang and told me no company can beat the benefits of the NHS superannuation scheme, and to stay put. I am still grateful for his advice. He worked for the Bradford and Bingley when they were a building society.........those were the days.

 

[Flying Dodo]

As I stated above, he couldn't have been opted out using that LV policy whilst working for the NHS, as the NHS scheme was already opted out of SERPS, as they provide the GMP which is broadly equivalent to what SERPS would have been.

 

[Milkfloat]

For those of us contracted out of serps, what is the best way to find out how long we were out for? The HMRC contributions checked just says which years you made appropriate contributions, not if you were contracted out or not.

 

[Flying Dodo]

In theory, if you write into the DWP at their Newcastle Pensions Centre, Futures Group, The Pension Service 9, Mail Handling Site A, Wolverhampton WV8 1LU, and make the specific request, they can tell you what amounts were paid to whichever provider you've been contracted out with and the dates. But it might take them 6 months, but generally they'll probably say they can't.

However, whichever pension provider you've got a policy with should be able to provide you with a breakdown of the amounts of the rebated NI contributions received, and for which tax years.

Well, probably all providers apart from Phoenix as they are spectacularly inefficient as being a vulture company which has taken over so many insurance companies in the past, their legacy computer systems often don't have the data saved.

 

[SpokeyDokey]

Just as a brief example:

My State Pension forecast reads something like this (heavily paraphrased)...

New State Pension + income related element (S2P) = £12500.

Reduction for contracted out period = £3000.

Net = £9500 ie around £1000 ahead of the New State Pension.