The Minefield of Serps and Opting Out

#WePaidInYouPayOut

We’ve all heard about the no notification, the lack of information, the mal-administration surrounding the events of women’s pension age delay, we hear very little about….

The Minefield of Serps and Opting Out

The confusion surrounding this issue is huge …….

This affected men and women when they were able to ‘opt out’ and pay less National Insurance as they were ‘opting in’ to a work or private pension but……………

We find that some weren’t even informed they had been ‘opted out’ this is a contradiction of terms, ‘opting’ means to ‘choose’ many haad no choice……………

Those who were informed were advised they would be better off ‘opting out’ and received a higher pension…………….

Personal quotes and stories follow…………………

Many members are angry that this has occurred……………..

A #WePaidInYuPayOut initiative, thank you to all contributors.

And it gets worse, mal-administration in State Pension is bad enough, now look at the confusion over SERPS/Opt In / Opt Out and mal-advice on its outcome…….

AC – My local government pension opted me out without giving me notice. I started work in 1973 and because of this I am having to make two more years contributions!

JK – I was not aware of what opted out meant until a few years ago, when it went electronic and discussed on this forum. I thought it was a “private” pension I was paying into – not SERPS/opted out what ever it means – because lets face it – how many of us actually know what this 2nd penson bit meant. thought a pension was the NI every one paid, – thought work pension was private on top of – not instead of. I do feel cheated by this lack of knowledge to be honest and grateful for social media educating us – even though we all are p**d off by our treatement.

I have no real idea of the impact of being opted out has had on my pension. Did not realise what opted out meant to be honest, and since started paying into Local gov pension scheme – the final salary part has been scrapped, then the average salary has been scrapped and now I pay the normal NI same as everyone else for the next 5 years until I reach 66. So projections include all manner of mind boggling figures.

PM – When I went part time to full time. I was allowed into the pension scheme’s… How silly I thought it was a perk of the job.

MB – I worked as Civil employee for the Ministry of defence I have a Lump sum of around £8000 which hasn’t gained a penny interest since the crash 10 yrs ago I will also get the princely pension of £1200 per annum was divorced with 2 kids since I was 22 ,worked full time and was with MOD for 14 yrs .

SMW – No way was I told that when I opted out of serp that this would mean any pension I built up would be deducted from my state pension. If I had known I would be no better of I would never have bothered. I truly believed I would be getting this on top of my pension otherwise what was the point.

RP – Born May 1960 worked since 16. Widowed at 53. 39 years NI. COPE is so confusing and I definately
did not know I had been contracted out. Its difficult to work out what state pension I will get. I write each year for a forecast as don’t trust website.

KL – I didn’t understand what it would mean in later years. I assumed that they wouldn’t put us in these schemes if we would be losing out. How wrong and naive was I.

HB – I was opted out for a few years, this has reduced my state pension. My forecast said I had to pay NI for another year and that my private pension would be a LOT more than it actually is. I remember signing up to it, but had no option and I was never told the consequences of it! Obviously more of a benefit to the employer!!!

VS – Was told by colleagues to opt out, as though our wages were low compared to private sector, we would get a better pension. Finance and pensions dept stated they were not allowed to give advice. When I asked for my state pension forecast the DWP are saying I will get the full state pension, but my contracted out pension will be deducted by £26 pw.

MF – I joined the WRAF in 1977, age 22, I recall being told, words to the effect, ‘by serving in the RAF you will pay less stamp’. It was not made obvious that my SP would be dramatically reduced.
The same has happened to my husband.
So, I’m having to wait an extra 6 years for my SP!
I’m contracted out!
I don’t work, so not contributing further NI! So that’s affecting what I will receive!

LJ – When I opted out of SERPS (1970’s) because I was told tI had to join a works pension I believed that I would receive this on top of state pension. Only just become aware that any other pension I hold will be deducted before I receive SP!! Its a long time ago but the way they ‘sold’ workplace pensions we probably all believed we wouldnt need SP anyway!! We were totally taken in.

PM – I couldn’t join banks scheme. As worked out part time around school pick up and drop offs. Went to full time when daughters were older and automatically joined.. Nievly thought it was a perk of the job…since drawing on this small pension of £165. A Month. I find this is to be deducted from from my sp. . Youngster’s still don’t have knowledge about this’!!!!!

RP – I had no idea I had been opted out. I worked part-time so I could be home to raise children. I lost my job with local authority when austerity hit in 2011 and lost my husband in 2013. No widows pension, small local government pension as part-time worker and reduced state pension due to COPE. I dont retire for another 7 years. Trying to workout what I should do re shortfall to state pension is a minefield. I have a state pension forecast that says I can’t improve my state pension. But if I don’t continue to pay NI until I reach spa I may not reach my forecast. SO HAVE I PAID ENOUGH NI OR NOT? Clear as mud!!! Awaiting replies from letters to DWP.

CW – SERPs (State Earnings Related Pension Scheme) was an additional top up pension to the basic state pension.
SERPs began in 1975 under the Labour Prime Minister Harold Wilson.
Labour then had a new Prime Minister Callaghan, who took over 80 per cent of workers out of the SERPs system, with public sector workers not needing to consent as their entire job was contracted out.
The majority of public sector workers were low waged, so men and women’s works pension is mostly between £2,600 and £4,000 a year.
The huge number of austerity public sector job cuts meant a large number of ladies in their 50s early retired on such low works pensions. Welcome to my world.
Back in 2004, the private (not works) pension industry wrote to all their customers, telling them to opt back into SERPs (called from 2002 State Second Pension) as in no way would their works pension be as much as the additional top up pension, for most wage levels.
The flat rate law Pension Bill 2014, came into force from April 2016.
The Pension Minister in the coalition government of Tory and Lib Dems, was now former Lib Dem MP Steve Webb, who did say perhaps the message about the flat rate had been over-simplified. It was said that the flat rate would not be less than the basic state pension rate that the pensioners retired before 2016.
My state pension forecast with 38 years National Insurance record in 2019, is going to be £122 per week.
This is the old pensioners’ basic state pension rate in 2017 of £122.30 per week.
This is because I was opted out from SERPs from the very first day it came into force, April 1978.
I maybe one of the few members of the public who was warning about the flat rate’s effect on opted out SERPs’ state pension value from 2013.