Contracting out of S2P

[Lewis]

I'm thinking about pensions.... I'm currently contracted into S2P (previously SERPS). As I understand it the arguments for being in/out are as follows:

Reason to be in
(1) Pension companies advising it as rebate from S2P reduced and predictions for stock market growth reduced, therefore you'll get more at retirement if you stay in.
Reasons to be out
(1) Rebate assumes salary of over £11K so if you earn less you are getting free money to invest.
(2) Can government be trusted to not take away S2P? i.e. bird in hand better than two in bush.
(3) Insuance companies may just be taking cautious approach to prevent misselling claims in future.

My salary is over £11K but I don't trust the government an inch, seems like there are some clever people out here, so what're peoples thoughts?

[Gonzo]

I'm thinking about pensions.... I'm currently contracted into S2P (previously SERPS). As I understand it the arguments for being in/out are as follows:

Reason to be in
(1) Pension companies advising it as rebate from S2P reduced and predictions for stock market growth reduced, therefore you'll get more at retirement if you stay in.
Reasons to be out
(1) Rebate assumes salary of over £11K so if you earn less you are getting free money to invest.
(2) Can government be trusted to not take away S2P? i.e. bird in hand better than two in bush.
(3) Insuance companies may just be taking cautious approach to prevent misselling claims in future.

My salary is over £11K but I don't trust the government an inch, seems like there are some clever people out here, so what're peoples thoughts?

I would contract out although that is because I will not be in this country when I retire.

[glashIFA@Paramount]

I'm thinking about pensions.... I'm currently contracted into S2P (previously SERPS). As I understand it the arguments for being in/out are as follows:

Reason to be in
(1) Pension companies advising it as rebate from S2P reduced and predictions for stock market growth reduced, therefore you'll get more at retirement if you stay in.
Reasons to be out
(1) Rebate assumes salary of over £11K so if you earn less you are getting free money to invest.
(2) Can government be trusted to not take away S2P? i.e. bird in hand better than two in bush.
(3) Insuance companies may just be taking cautious approach to prevent misselling claims in future.

My salary is over £11K but I don't trust the government an inch, seems like there are some clever people out here, so what're peoples thoughts?

If you log onto www.adviserzone.com and look under briefing cards you'll find an FSA info sheet on contracting-out, yes or no? It's just factual and i personally agree with your last comment.
i think it boils down to a political versus investment decision. If you think managing the rebate personally will produce better returns then contract out. If you don't trust the gov't to honour their obligations then contract out (bear in mind the gov't are already looking at increasing the state psn age and watered down the benefits that were promised under SERPS, so they have a history of going back on promises).
Otherwise, stay contracted in.
There used to be pivotal ages for contracting out and in of SERPS which clearly identified, based on sex, age and salary, wether or not you would be better off in or out. Those have gone now and i agree that most life offices have opted for the "stay contracted in" option and i too think this is because of the potential for a future mis-selling episode.

[tim123]

Reasons to be out
(1) Rebate assumes salary of over £11K so if you earn less you are getting free money to invest.
(2) Can government be trusted to not take away S2P? i.e. bird in hand better than two in bush.
(3) Insuance companies may just be taking cautious approach to prevent misselling claims in future.

Yep all of them, IMNO you should ignore the cautious advice of the Insurance company and take the rebate.

tim