Pension News Second Pension Guide Launched

Written by Editorial Team

05 October 2004

Pension providers are to send out six million leaflets advising their customers over the decision to contract out of the State Second Pension.

The Association of British Insurers and the Association of Independent Financial Advisers have produced the guide to help people decide whether they would be better off paying into the second state pension instead of their private pension.

It warns that customers should review their pension options every year and points out that a decision to remain contracted out should not be based solely on expectation of a larger pension.

That is because, it explains, contracting out is meant to provide the same pension as the recipient would get under the second state option.

Pensions minister Malcolm Wicks has welcomed the initiative to inform consumers, saying it presents a “balanced view of the issues involved in contracting out”.

“It is important people have all the information they need to help them make the right decisions about retirement,” he added.

However, consumer body Which? criticised the publication for not giving people enough facts about what they should do next.