S.e.r.p.s

[kloofnek]

Will some kind person explain to me ...in simple form please..what exactly is S.E.R.P.S

[hc4361]

It was a voluntary extra income tax you could pay in the hope of boosting your state pension.
You could opt out of it and pay in to a private pension instead.

[AB Editor]

SERPs can mean:

Search Engine Results Page(s)

But it might mean something else :) What's the context?

[hc4361]

Oh, it stands for State Earnings Related Pension Scheme, and was supposed to be accessible to all earners.

[AB Editor]

State Earnings-Related Pension Scheme - http://www.nidirect.gov.uk/serps-and-the-state-second-pension


I've forgotten how to check context on my own site!

[Zacs-Master]

It's all those buns

[Hopkirk]

Voluntary extra income tax, HC?

No it wasn't.

It was just that part of your National Insurance contributions were used to create a second pension.

[hc4361]

Doh, course it was, Hopkirk. I opted out and paid less NI.

[kloofnek]

The reason ask is my friend`s partner has been getting Pension Credit with benefit???(his job folded up about 18 month ago).However,she was saying when he is 65 and gets his State Pension he will be better off ...will not be getting PC as his pension will be higher than that as he has paid into SERPS..is this like a works pension(which has just become compulsory,,I think.

[Hopkirk]

You may have opted out HC, but you didn't pay any less NI.

[hc4361]

It does boot the amount of state pension above the basic amount. He should have a pension forecast that will tell him how much he will be getting - it maybe that he will no longer be entitled to pension credit which is means tested.

[hc4361]

I definitely did pay less NI, hopkirk, it was paid into my works pension instead.

[kloofnek]

If he no longer receives PC,this will mean he will have to pay for glasses ,dental treatment etc.The way I see it ,you can`t win!!!!

[hc4361]

Yes and it's always been that way, kloofnek. There will always be some people that get 10p a week too much and lose out on £100s a year.

[hc4361]

When will his wife get her pension?

[Hopkirk]

I can believe it was paid into a pension, but still find it odd that you paid less NI.

[hc4361]

Why would anyone opt out of SERPS if they were paying the same NI?

"When you join a workplace pension scheme you may choose to opt out of the additional State Pension, also known as the State Second Pension (S2P). This is called contracting out. It means instead of building up additional state pension, you'll build up pension through the workplace scheme. You'll get a rebate on your national insurance contributions but this will go towards building up the pension scheme as a whole rather than to you personally"

http://www.adviceguide.org.uk/wales/debt_w/debt_pensions_e/debt_types_of_pension_e/workplace_pensions.htm

[THECORBYLOON]

To keep the explanation very, very simple, SERPS was a payment on top of the Basic State Pension. If folk had earnt more than the minimum for any years to count toward State Pension, the excess was put in a "pot" for that person and each year's amount was re-valued to take into account inflation.

At pension age, a fraction of the "pot" was paid out as Additional Pension each week.

[kloofnek]

He is not married to my friend,they do not live together although have been "courting" for around ten years now.She already has her SP and PC.

[hc4361]

Ah. Well if his entire state pension, including SERPS, is less than £145.40 he will still get pension credit.

[Peter Pedant]

well, you could always go and live in Coronation Park kloofje
Coronation St., sorry in joke....

You have put your finger on the 'paradox' of saving during ones life and getting X and then finding that if you have spent your "savings" as you went along. then the govt (that would be the British govt !) would give you X as a benefit.

and that is why IDS is trying to get into action on Pension reform - scrap or amalgamate SERPS and just give one pension or ... one benefit. Very laudable aim and absolute mess in practice.

Everyone says why bother - ( save for a pension ) and the answer I think as a pensioner is that it gives you independence. You still get your pension that you have contributed to.

I am currently involved in negotiations for someone who was eligible for pension credit ( he poor, very poor ) and then when he became very much less poor - oops looked on his pension credit as a .... pension. He thus failed to inform the authorities that he was no longer eligible for the credit on a means test and now has to pay back a year's pension. Sorry a year's pension credit that he wasnt entitled to.

Chaos - it is absolute chaos.