© 2011 Andrew Dickson Limited - chartered financial planners email: enquiries@andrewdickson.co.uk Our Views Advisability of opting out of S2P (State Second Pension) This issue is a matter for a detailed discussion as individual views must be taken into account. The Government Actuary, however, has made certain assumptions in determining the rates of rebate. These were calculated to produce equivalent benefits through a private pension arrangement that would broadly match the state benefits. The actual result may be more or less than the amount payable under S2P. The difference will depend on the performance of the investments in which the N.I.Rebates are invested (in your pension plan), and interest rates at retirement. There are, in our opinion, two fundamental issues to be considered when deciding whether you should be in or out of S2P... 1. the mathematical implications and viability of investing the N.I.Rebates and eventual pension achieved, when opting out of S2P and, 2. your own view on the likelihood of future Governments being able to maintain S2P benefits at the current level.  This is a complex issue and in August 2004 the Association of Independent Financial Advisers (AIFA) issued a leaflet jointly with the Association of British Insurers (ABI) warning of the uncertainty of future results when opting out of S2P. Various Insurance companies have since gone further to recommend their policy holders opt back into S2P straight away because they believe there is sufficient doubt as to whether the N.I.Rebates are adequate to provide a private pension at least equivalent to what would have been achieved by staying in S2P. The Government will end individual "opting out of S2P" as from 5th April 2012 and anyone still opted out at that point will automatically be returned to participate in the S2P, so the decision will be made for us. Please have a look at the News section. If you need more information or guidance, please let us know. We will be pleased to discuss this in more detail