Pensions Dilema

[annette tula]

I am 47 years of age with a frozen pension of 40K my retirement date is 2022. With all the speculation at present regarding pensions I am not sure whether I will or will not get a state pension when I am 60 - I have worked all my life from 15 and paid my national insurance. At the moment I have opted out. Should I be in, out, or what. I really am so confused by it all. My present company have only the stakeholder should I be contributing and what is a stakeholder ??

[Tractorboy]

It is very unlikely that there will be no state pension when you come to retire. For a start any party with this point of view would not be in power for very long, certainly not with a large number of the electorate either being retired or approaching retirement. With regards to your pension of 40K this sound a large amount if it is per annum, however if this is only a fund value that will provide your pension for you whole retirement, then it is a small amount and I would suspect it would only provide you with an annual pension of about �2500. (This is based upon todays prices) The issue of contracting out is too hard to explain here, however I can say that it only relates to the Second State Pension and it will have no effect upon your Basic State Pension. If your company will contribute towards your stakeholder then i would recomend joining. Any help that can be recieved towards providing a retirement fund must be taken.

[DaveP]

Also I would point out that the female State Retirement Age is increasing from 60 - 65 between 2015 and 2020. The supplier of your Contracted-out scheme should advise you as to whether you should be IN or OUT, contact them for their current guidance. A stakeholder is a low cost pension, the minimum that all employers must provide but they may not necessarily be contributing.

[Pink Hippo]

The ABI (Association of British Insurers) are currently issuing a mailing leaflet to you regarding Contracting In/Out and your options in regard to S2P. If you don't get one, phone your penison provider and ask for a copy. It's quite informative and explains about Pivotal Age (the age where the decision about being contracted in or out is quite important) You can also speak to a financial consultant, you can get advice over the phone or in person for free from alot of places.