What is a Personal Pension?
Question asked by Julian Hollis
I have a protected rights pension from the past and another one I’m currently paying into. I’m wondering if I should transfer the protected rights pension to the current one. What are protected rights?
You’ll have a protected-rights pension if you “contracted out” of the state second pension, or its predecessor, the State Earnings-Related Pension Scheme (Serps). Your pension will be made of a rebate of your National Insurance contributions as well as tax relief on your share of the refund.
However, constraints on protected rights pensions were effectively scrapped in April 2012, and plans were converted to normal defined contribution benefits. This means you have the same options as you would with any other defined contribution plan.
You may want to transfer your protected rights pension if you are looking to consolidate your pensions. You should seek pension advice before transferring to ensure this is the right decision. Please contact us to find out more.