COPE deduction (again)

waveydavey48

Hello folks, apologies in advance for re-visiting this old chestnut, particularly to forum members who patiently answered previous questions on the subject but I'm still confused and would be very grateful for your input.

In my defence I can say that I have read up on the subject and phoned the SP phone number a few times to get a definitive answer and just can't get past their hold music to speak to a person. Also, I think others will be in the same position, so here goes.

I worked for AVIVA from 1978 to 2003 so was contracted out of their final salary scheme. I then worked for another insurer for 10 years and paid into their DC scheme. I have now downshifted substantially and work 16 hours a week on a low salary, as much for interest as anything.

My state pension forecast says I am entitled to full SP of £168.60 with COPE of £57.15. I'm just trying to find out what pension I will get from the state. Will it be £168.60 or £168.60 minus £57.15 = £111.45.

I fully accept that I have benefited from lower NI contributions and am not moaning, just seeking clarity.

My SP forecast says I can't increase my SP any further. I have worked 41 years. My COPE for this year appears to be the same as it was last year. Does that mean that I can't reduce my COPE by continuing to work?

Royal London have a helpful article on this subject and an extract says

"If you have ever been ‘contracted out’ you may also see
a figure for your Contracted Out Pension Equivalent or
COPE. As explained earlier in this guide, this figure
is for information only, and has already been taken
account of in the state pension forecast that you have
been given."

Does the comment "has already been taken account of in the state pension forecast that you have been given" mean that the state will pay me £168.60 rather than £168.60 minus the COPE?

Finally, I am 57, will retire in a year or two so won't be paying NI much longer. I started full time employment at 16 so am ready to wind down.

Thank you.

molerat

COPE is already accounted for in that £168.60 so that is what you will get.


COPE cannot be reduced, it is a figure that is set at April 2016 and was used in your starting amount at that date. That is the only calculation it was ever used in and can be safely ignored.

bolwin1

You will get the £168.60 from the state.
The COPE figure is not a 'real' number per se, it's just an indication as to how much your contracted out pension(s) would have benefited by. It's also an endless cause for confusion, so you are not the only person asking :-)
Working any longer won't reduce the COPE amount, or change the money you'll get from the state.

waveydavey48

Thanks for those replies folks. The following is an extract from "Which" that I have just read.

"If you qualified for the state pension on or after 6 April 2016, you will probably get less than the full level of new state pension (£164.35 a week in 2018/19).

This often comes as a surprise to people, but it should be explained in your state pension forecast, in the form of a 'contracted out pension equivalent'.

This shows the amount of additional state pension you would have got had you not contracted out. This doesn't form part of your state pension, but should be paid by your workplace pension."

It implies (to me at least) that the COPE amount is paid by your occupational pension scheme and not by the state.

It would be helpful if the SP people would give their definitive view but trying to get through to them is impossible.

Thanks again.

Paul_Herring

It implies (to me at least) that the COPE amount is paid by your occupational pension scheme and not by the state.

https://www.tax.service.gov.uk/check-your-state-pension/account/cope

Your COPE estimate is £##.## a week.

This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.

In most cases the private pension scheme you were contracted out to:

- will include an amount equal to the COPE amount
- may not individually identify the COPE amount

The total amount of pension paid by your workplace or personal pension schemes will depend on the scheme and on any investment choices.

xylophone

See post 2


https://forums.moneysavingexpert.com/discussion/comment/75837120#Comment_75837120

squirrelpie

It implies (to me at least) that the COPE amount is paid by your occupational pension scheme and not by the state.

I agree the advice from Which is not ideally phrased. They offer a very useful service, which is sometimes wrong, just like everything else in life.

It would be helpful if the SP people would give their definitive view but trying to get through to them is impossible.

I agree that getting through to them can take a while, but I've never found it impossible. Are you sure you have waited long enough on the phone?

IvanOpinion

waveydavey, I am glad you asked this question. In the past I have generally thought I understood the situation only to read another article (like the text from Which) that causes confusion to me again. At the minute, my understanding is that the amount you see on the page (£168) is what the state will pay you and the COPE amount is not deducted.

GDB2222

In my humble opinion, the letter stating the pension forecast needs to be phrased differently. It's daft that it's so confusing.

AnotherJoe

I'd go further, the COPE sentence needs to be removed. It causes only confusion and provides no benefit. All the state should tell you is what they will be paying you. Mentioning another, entirely fictitious number is if no use to anyone.

AnotherJoe

waveydavey48 wrote: »

Thanks for those replies folks. The following is an extract from "Which" that I have just read.

"If you qualified for the state pension on or after 6 April 2016, you will probably get less than the full level of new state pension (£164.35 a week in 2018/19).

This often comes as a surprise to people, but it should be explained in your state pension forecast, in the form of a 'contracted out pension equivalent'.

This shows the amount of additional state pension you would have got had you not contracted out. This doesn't form part of your state pension, but should be paid by your workplace pension."

It implies (to me at least) that the COPE amount is paid by your occupational pension scheme and not by the state.

It would be helpful if the SP people would give their definitive view but trying to get through to them is impossible.

Thanks again.

Isn't that what people here have been saying to you ??
Note though that "the" COPE amount of £57.15 won't be paid to you . You'll get something. Most likely it will be more. It could be less. £57.15 is merely an inaccurate estimate. Most likely (to the point of near certainty) it also will be not identified as "COPE" anywhere plus it may be subsumed into other pensions so you have no way of carving that portion out.
For example, I contracted out. The subsequent pension funds then got transferred into another scheme to which I made substantial payments later on. I now drawdown from that. Some % of that drawdown is my "COPE". there's never going to be anyone giving me a statement identifying what that is.