If you’re confused about the difference between a SIPP (Self Invested Personal Pension) and a SERPS (State Earnings Related Pension Scheme), we’ll help you get to grips with the pension terms in this handy guide – and what they mean for you.
What is a SIPP?
A Self Invested Personal Pension (SIPP) is a personal pension scheme approved by the government, and they’ve been around since 1989. Since then, SIPPs have taken off with over 1 million UK citizens who are looking to grow their pension pots.
SIPPs were created to give experienced investors the opportunity to take more risks, but the general public should not have been encouraged to do so. As SIPP investments are often considered high-risk, they should only be invested by seasoned investors.
Mis-sold SIPP Pensions
When it came to light that a large proportion of the UK public were offered the opportunity to invest with SIPPs, the Financial Services Compensation Scheme (FSCS) set aside millions of pounds to pay compensation to those who were mis-sold.
SIPP Claims: how do I know if I’ve been mis-sold?
Unfortunately, all across the UK amateur pension investors were convinced to switch to SIPPs without understanding the ins and outs. There are a number of signs that would suggest you might have been mis-sold your SIPP, from a lack of transparency around fees to receiving poor advice. For more information, take a look at our top signs you were mis-sold a pension.
What are SERPS?
A SERPS (State Earnings Related Pension Schemes) differs from a SIPP in that it was a pension scheme offered by the state rather than a personal pension plan. First introduced in 1978, SERPS have now been replaced by the State Second Pension.
If you were signed up to a SERPS, the amount you would receive from the state would relate to your earnings over your working life. You can check how much you’re entitled to here. To have qualified for SERPS, you must have made Class 1 National Insurance contributions, but self-employed people were not eligible.
Many UK citizens chose or were advised to opt-out of SERPS, instead opting for a personal pension. However, if you’re still entitled to SERPS, you’ll still receive your payment once you reach the state pension age.
What to do if you’ve been mis-sold a pension
If you think you’ve been mis-sold your Self invested Personal Pension (you can no longer claim for mis-sold SERPS), our claims experts can help you claim the compensation you deserve.
Contact us today to see if you are eligible for a SIPPs claim. Fill out our quick enquiry form and we’ll get the simple process started. Or, if you prefer, you can call us on 0161 968 0768 and one of our expert advisors will be more than happy to help.