TRACKING DOWN A PENSION POT
A reader wrote to say he had been ‘contracted out of SERPS’ for more than twenty
years and asked what pension he would get. I could estimate his state pension.
But he seemed unaware what ‘contracted out of SERPS’ meant.
It means that he was not paying into the State Earnings Related Pension Scheme
(SERPS). That means his National Insurance contributions were lower but the
difference – plus a bit more – was being paid into a personal pension or a
pension at work.
So somewhere there is a pension pot with his name on it and there is money in it
from him and, perhaps, his employer as well. If the total is less than £18,000
and he has no other non-state pension he can take it out in cash when he is 60.
And if it is less than £2000, from6 April he can take it out in cash whether or
not he has another pension. In both cases a quarter will be tax-free, the rest
will be taxed as income.
Tracking down this lost pension money is easier than it used to be thanks to the
free Pension Tracing Service run by the government. It has details of more than
200,000 schemes and every year reunites thousands of people with their own
pension pots. These will normally have been paid into since 1975. Before that
people who left a job lost the rights to their pension money. But from that date
they got limited rights to it and the more recently you paid in the more rights
you have.
To use the service you should make a list of where you worked and when. Note
down the name of the firm and its address – remember firms get taken over and
change their name but the address may well stay the same – the type of business
it was and when you belonged to the pension scheme. If you have any relevant
documents tucked away somewhere that will help immensely.
If you want to trace a personal pension – perhaps sold to you in the late 1980s
or 1990s specifically to ‘opt out’ of SERPS – the service can help with that
too. You need to start with the name of the adviser or the bank, insurance
company or building society involved with it or the name of the company which
ran the pension fund for you. Original documents would be very helpful but even
if you do not have them it is well worth trying.
It is your money. Get it back.
More information or apply online at
www.direct.gov.uk/en/Pensionsandretirementplanning/Companyandpersonalpensions/DG_10027189
or phone 0845 6002 537.
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