Contracting Out to end after 2011/2012 on Defined Contribution Pensions

The Government has confirmed that from 6 April 2012, contracting out of the State Second Pension (S2P) through defined contribution schemes will be abolished. That includes all money purchase arrangments such as “COMP” occupational schemes, group personal (& stakeholder & SIPP) pension schemes, and all individual plans. However, customers can still stay contracted out for the 2011/12 tax year.

Protected rights will in future become ordinary benefits and customers will no longer have to provide a pension for their spouse/civil partner when they retire – although they can if they still want to. So, a nice bit of simplification there.

If you are contracted out and are not sure if that is still appropriate for you for this current tax year, you can review this useful q & a document: contracting-out

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