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Cope what is it?

Conflicting reports on here and everywhere, cant seem to understand what it is and how it affects me.

In a nutshell, my cope amount is 35 quid, does this mean when i retire i get state pension minus 35 quid or not?
My gov gateway login tells me i will have enough years and i will qualify for full state pension etc, but years when contracted out are showing as paid full NI contributions.

Depending on which article you read this COPE amount will be deducted form stet pension, ie 156 -35 IN MY CASE.

Please someone sum this up so a simpleton can understand it?
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Comments

  • molerat
    molerat Posts: 34,951 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    COPE has no effect on the pension you will receive. It was only used in calculating your starting amount at April 2016 and will never see the light of day again. Your starting amount was the higher of the old state pension + additional pension (of which the figure you saw already had a contracted out deduction made) or the new state pension - COPE.

    I have never seen any articles where it states the COPE will be deducted from your pension amount.
  • Sorry Molerat, dont understand most of that,

    The first bit you wrote, so COPE will not affect me getting full state pension?

    And why do my contracted out years show as having payed full NI contributions?
  • molerat
    molerat Posts: 34,951 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Sorry Molerat, dont understand most of that,

    The first bit you wrote, so COPE will not affect me getting full state pension?

    And why do my contracted out years show as having payed full NI contributions?
    No effect, you will receive what is shown on your forecast.

    You did pay full NI for the basic pension, it is just the additional pension you did not pay for.

    Your starting amount at April 2016 was no lower than you were entitled to already.
  • LHW99
    LHW99 Posts: 5,352 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    I think if you had retired in (say) May 2016, so that your pension was based on the old system, COPE was important in calculating what you would get.
    Now you are building up additional pension while you are working, until you have enough years / contributions to be due the full new pension, and the COPE amount (whatever it was) can effectively be ignored.
  • Cheers men.

    Obvious question is though, by contracting out i have a pension thats done well over the last 18 years, 22k of the money in it was from NI contracting out (SERPS).

    Joe Blogs next to me didnt, both me an Joe will get full state pension, but ive got a private pension with tens of thousands in it and rising, he hasnt.

    How is that fair?
  • kangoora
    kangoora Posts: 1,193 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    I had a similar query which may help you?

    https://forums.moneysavingexpert.com/discussion/5772722
  • So, where are you penalised for the period you contracted out?
  • pensionpawn
    pensionpawn Posts: 1,016 Forumite
    Seventh Anniversary 500 Posts Name Dropper
    Cope (contracted out pension equivalent) is the amount that will removed from your full new state pension (for 35 years NI contributions: check via government gateway) for contracting out into a personal pension. However depending on how many years you have to SPA after the introduction of the new state pension you will potentially have time to 'earn' years under the new regime that will cancel out the cope figure. You will then benefit from the contracted out element in your private pension and a full new state pension. For me I need to contribute around another 6 years and SPA is well into the future. Mostly a problem for those who hit SPA shortly after the introduction of the new state pension although they will receive the maximum amount under the old state pension.
  • dunstonh
    dunstonh Posts: 120,095 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Joe Blogs next to me didnt, both me an Joe will get full state pension, but ive got a private pension with tens of thousands in it and rising, he hasnt.

    How is that fair?

    Its not quite as simple as that. Until you get to 35 years, those contracted out years work against you with a deduction. However, when you get to 35 years, every year under the new system after that will see a contracted out year drop off.

    One of the reasons for contracting out was to obtain potentially more. You took on some of the risk and that risk is paying off.

    There are actually bigger winners. For instance, the self-employed, under the old system only got the basic state pension. Under the new pension, they get the full amount. Remember when Hammond was crucified for trying to increase the NI contributions of the self-employed by an average of 47pence a week? This was just after the self-employed got a state pension increase of nearly £50per week.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • So let me get this straight...............................
    If my SP forecast states £173 a week, this is what i get, even though on page 2 of the statement it gives a COPE figure of £33?
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