Am a bit about this as I know I really ought to know.. and I know that SERPS in the "state earnings-related pension scheme".. but that doesn't help me!
When I was about 18, a lot of people in the office where I worked opted out of SERPS; we had a salesman from Abbey Life come round and ask us if we wanted to do it. It basically meant your NI contributions went towards a pension scheme and you could top that up with a bigger contribution if you chose. I didn't choose, I was on pretty low wages so just my basic NI contributions were used.
I worked there for another few years, then had my first child and then worked at other places on and off for another few years and during this time received statements/letters from Abbey Life asking me if I wanted to top-up but I never did (could never afford to.)
Now 17 years or so later, I am in a postion where I haven't work for years so obv. haven't paid NI for years; have 2 more kids, one of them disabled, a disabled DH and am in a situation I obviously never saw myself in all those years ago. I think I always assumed I would be working so my NI contributions would always be adding to my pension.. if that's how it worked.. I can't even remember really!
So what does this actually mean? We have no other planned provision (ie private pension paid through work due no work) for retirement although I DO intend to have a job one day, and a better one than I have ever had (am studying for a degree for this reason.) But what did I actually DO when I opted out of SERPS? Do this mean that I won't get an ordinary pension that "all" senior citizens get? Am imagining being old and on the breadline, trying to feed ourselves out of one person's (DH's!) pension!
Please could someone in the know explain this to me? I know this is very remiss of me but what with all else, it's never been at the forefront of my mind.. but I keep thinking about it lately.