The then UK Minister for Pensions, Baroness Ros Altmann, said: “People have had on average 11 jobs during their working life, which can mean they have as many workplace pensions to keep track of.”

Contracting out of SERPS potentially added another layer of complexity to this.

What was SERPS, and what did it mean to ‘contract out’?

If you were an employee working in the UK between 1988 and 2002, you might recall the phrase “contracting out of SERPS” or simply “contracting out”.

SERPS refers to the State Earnings-Related Pension Scheme, a top-up to the main UK State Pension. SERPS was subsequently renamed the State Second Pension (S2P) and State Pension top-up.

At the time, there were somewhat alarmist messages that these UK State Pension benefits could not be sustained in the long term – due mainly to people living longer – meaning they would have to be reduced.

Some employees, therefore, saw and seized upon the potential benefits of contracting out.

A portion of National Insurance contributions (NICs) paid by employees funded SERPS. When someone contracted out, that portion was directed into a personal pension that they designated. These employees still paid the same amount of NICs, but part of it funded their own personal scheme instead of the government’s SERPS.

To confuse matters, some employers offered occupational pension schemes that were automatically contracted out. These schemes operated via a different method, meaning these employees paid lower NICs than those with personal pensions or “contracted-in” company pension schemes.

So far, so straightforward (sort of).

It could get complicated if you changed jobs. A lot of people who had contracted out through a personal pension and then joined a contracted-out occupational pension scheme believed their personal pension automatically transferred to the new workplace one.

But that wasn’t the case – and that’s how so many personal pensions were forgotten.

Consequently, many will have contracted out of SERPS via a personal pension and have no idea which company that scheme is with.

How to find the provider of your contracted-out personal pension in the UK

Despite living in such a digital age, British expats will have to rely on “snail mail”. You’ll need to write to:

HM Revenue and Customs, National Insurance Contributions Office, Services to Pensions Industry, Benton Park View, Newcastle Upon Tyne NE98 1ZZ

Based on experience, GBPensions director Tony Chamberlain suggests the following wording:

My name is [your full name], formerly [list all previous surnames]. My date of birth is [DD/MM/YYYY], and my National Insurance Number is [AB 12 34 56 C].
I believe I contracted out of the State Earnings Related Pension Scheme (SERPS) and/or State Second Tier Pension some years ago when I worked in the UK but have no records of this.
Please confirm from your records which pension companies or employers my National Insurance rebates may have been paid to consequently.
Thank you.

What to do if you learn you have a contracted-out personal or workplace pension

“HMRC’s reply could take a few weeks to come through,” says Tony. “But you may enjoy a pleasant surprise when it does!”

Once you know your pension provider/s, you can start the search for your lost monies. The list of resources in Part 1 of Helping you reunite with your long-lost UK pension scheme could be helpful for providers’ contact details, etc.

“Then you can consider what you’d like to do with these funds,” Tony continues. “If they’ve been lying dormant in the UK for several years, it’ll be vitally important to carefully weigh up the tax implications of any kind of transfer to a New Zealand QROPS (Qualifying Recognised Overseas Pension Scheme) or UK SIPP (Self-Invested Personal Pension).

“We’re always happy to discuss the options, and, regardless of the conversation’s outcome, there’s no obligation to proceed with GBPensions,” he affirms.