Pension advice in Glasgow and Lanarkshire
Contracting out of SERPS

If you ever Contracted Out of SERPS - most likely with an Insurance Company - this contracting out arrangement came to an end in April 2012. 

Since April 2012, anyone who was still contracted out, was contracted back in to the State Second Pension.

Since April 2016, the State Second Pension has been replaced with the Single Tier Pension - a flat rate state pension that is based on the level of National Insurance contributions over your lifetime.

At Affinity, we would urge everyone to undertake a review of their contracted out arrangements, especially if this hasn't been done for some time. Now that contracting out has been abolished, it has resulted in some fundamental changes to what you can do with your fund.

When did you last review your plans?
Did you know that the company who manages your Contracted Out pension applies an 'Annual Management Charge' to do this? That's a charge taken directly from your pension fund - regardless of whether any growth is achieved or not.

Since 1988, much of this Contracted Out money was invested in 'With Profits' funds. Did you know there are companies who have applied a 'no annual bonus' policy on their With Profits fund for years? In many other instances, there is a little annual bonus being applied but it can, in some instances, be barely more than the charge that is being taken.

Management Charges coming off your fund with little or no bonus being added seems less than ideal.

Contact Us for a free, no obligation review of your plan and we will provide you with up to date, accurate and jargon free information.

At Affinity, we are completely Independent which means the information you receive will be completely impartial.