Paid Up Pension

Many of you will have a pension that you no longer contribute to. Perhaps this is because you have moved to a new job and left the old pension behind.

Maybe you have had a change in your personal financial circumstances. Perhaps you have married, bought a house or had children. Unfortunately it could also be through redundancy that people cannot make contributions to their pension.

Or maybe you contracted out of SERPS. SERPS is an abbreviated name for the State Earnings Related Pension Scheme, also known as the additional state pension. It was a pension scheme operated by the government, which ran until 5 April 2002. SERPS has now been replaced by the Second State Pension. Many people chose to ‘contract out’ of SERPS.

This meant that they made contributions to a private pension scheme, and reduced or eliminated their entitlement to SERPS.

This was popular amongst employers as it resulted in their paying less in National Insurance Contributions.

This option was initially only available to those who contributed to final salary pension schemes, but the opportunity was also opened up to money purchase schemes in 1998.

Whatever your situation maybe, many of these personal pension schemes are inflexible. Let us look at them in more detail.

Paid up Pension Schemes

Single Provider Annuity

No Cash Account

No Draw Down facility

No Online Valuations

Limited Fund Range

Limited Fund Managers

No Rebalancing

No Annual Reviews

Flexible Pension Schemes

Whole of Market Annuity

Cash Account

Draw Down

Online Valuations

Whole of Market Fund Range

Whole of Market Fund Managers


Annual Reviews

So whether you call it a paid up pension, dormant pension or frozen pension it pays to look at your options.