Problem with COPE being LESS that pension

FlyBoy

Many forums talk about what COPE is, but I have the following issue with the company that my pension is with that took the SERPS contract out contributions back in 1987 when Thatcher gave us those backdated "extra" years contributions:


According to the gov.uk website for MY pension records, my COPE amount should be at least £61.46p per WEEK.
However, my pension company's quote is that the entirety of my pension pot will only product an amount of £57 per MONTH! That's £13.15p per WEEK compared to the Gov saying it should be £61.46 per WEEK.


So, has anyone else had this problem with the COPE being much less than the Gov claim it should be?

dunstonh

COPE is a hypothetical figure based on what you have given up via the state pension. Your contracted out benefits may be higher or lower than COPE.

However, my pension company's quote is that the entirety of my pension pot will only product an amount of £57 per MONTH!

Is that a DB scheme or money purchase scheme?
If money purchase, is that a real figure or a statement projection (which are artificially lower than reality and include inflation to give a today's value.

FlyBoy

Well I'm 59 now the the £57 a month is TODAY's quote if I took a "for life guaranteed" annuity now.

As for the first question, I don't believe it should matter. When the Pension company took on the job in 1987 they should at least provide the minimum the Gov expected I would get, as stated by the Gov today.

So either I've been mis-sold by the Gov and/or the Pension company, or the funds I'm in have been entirely mis-managed and/or the fees have destroyed what i should be getting.

dunstonh

Well I'm 59 now the the £57 a month is TODAY's quote if I took a "for life guaranteed" annuity now.

Right. so, its an actual quote rather than a projection. That would make the pension fund around £17,000

If it it is only around £17,000, that would suggest you were not contracted out for very long. Have you checked your online state pension projection and the years showing for contracting in and out?

Were you in any other pension scheme, such as a defined benefit scheme that was also contracted out?

What is the state pension figure you are being quoted?

As for the first question, I don't believe it should matter. When the Pension company took on the job in 1987 they should at least provide the minimum the Gov expected I would get, as stated by the Gov today.

That is an incorrect assumption. Contracting out has never had any requirement to match contracted in benefits.

So either I've been mis-sold by the Gov and/or the Pension company, or the funds I'm in have been entirely mis-managed and/or the fees have destroyed what i should be getting.

Or you are mistaken in your figures somewhere. Such as how long you were actually contracted out for or which pensions you were contracted out with.

Most people contracted out via a personal pension are generally cost neutral in terms of value (if you ignore the fact that many still qualify for the full state pension despite having periods of being contracted out). Those that took increased investment risk tend to be much better off. Those that took too low investment risk (or no investment risk) tend to be worse off.

xylophone

The COPE is an estimate of the Additional State Pension you would have received had you not chosen to contract out into a personal pension.

What you actually receive depends on how well the investments within your personal pension have performed.

https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service

FlyBoy

Thanks to all.

dunstonh:

Your maths is quite accurate and, although I need to think and research more, the rest of your answers appear to be spot on as well.

Ta.