UK second state pension or SERPS: FSA guidance on whether to contract outMonday, November 06, 2006
For UK workers - extracts from the UK Financial Services Authority's factsheet "The State Second Pension
– should you be contracted out?", just issued (which you should read in full if interested):
"Nearly everyone can expect to get a basic State Pension when they reach State Pension age. You will also qualify for the State Second Pension (S2P) if you are employed and earning above a certain level on which you have paid National Insurance contributions. S2P is paid in...
It is important that you compare the differences between being in and out of S2P and understand the risks. Independent analysis that has been done for us [the FSA] suggests that most consumers are likely to be financially worse off by contracting out or staying contracted out during 2006/07. This position may change in future years... You should make sure you review your decision every year."
There's a table in the leaflet comparing the main differences between being in and out of S2P which you should think about in the context of your own personal circumstances.