SERPS (State Earnings Related Pension Scheme) CompensationWere you a victim?
Expert help and support from Greg Vaughan Financial Services: the pension claims specialist
SERPS (State Earnings Related Pension Scheme) mis-selling
In 1988, the Government allowed individuals, for the first time, to leave SERPS (known as ‘contracting-out’) and have part of their National Insurance Contributions paid into a personal pension plan instead.
More than 5 million people were contracted-out of SERPS in this way at some stage during their working lives.
It is now estimated by independent analysts that up to 4 million of these personal pension plans will provide much lower benefits than would have been payable from SERPS.
This is due to a combination of factors: poor investment performance, high policy charges, and Government reductions in the premiums they pay to personal plans.
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It is doubtful anyone who was advised to contract-out was warned of the risks. On the contrary, contracting-out was presented almost as a no-lose proposition: you didn’t have to pay a penny extra for it and you would be much better off in retirement as a result.
Where you mis-sold?
The first step in the process is to find out whether you are a victim of mis-selling. As a general rule, if at the time of advice you were aged over 40 (women) or 45 (men) then you have almost certainly lost out from contracting-out.
Alternatively, if your salary at the time you were contracted-out was under £10,000 per annum, again you have probably lost out from contracting-out.
Unfortunately, you cannot transfer your personal pension fund back into SERPS. But you can pursue the firm that advised you to contract-out for compensation so that you do not lose out at retirement.
Contact Greg now to find out if you are owed money.