Check your State Pension error

DBdoobydoo

daddydodo wrote: »

Crikey I thought I was understanding all this but now I am very confused.
My recent SP forecast of last week is
£168.60 @ 2032
£156.31 @ 5-Apr-19
States that I need 3 more years NI contributions to get to £168.30

I have never been in SERPS and my COPE estimate is £61.64/week. Does my COPE element subtract from my State Pension forecast? I have read and re-read my forecast and I can interpret it as either -
1. My SP is paid regardless of my COPE
2. My SP is paid at a lower level due to being contracted out

Could someone offer an opinion pls.......

You must have been in SERPS/S2P at some stage otherwise there would not be a figure for a COPE.

When I took my pension last year I was expecting to only get about £10 more than the old state pension as I had thirty years before 2016 & only a couple of years post 2016. I worked abroad for fifteen years & even with buying added years I only had 34 years contributions in total. I'm actually receiving £140/week so must be getting about £10/week from SERPS.

As far as I know I only had a period of four years (1979-1982) when I was in SERPS. My COPE was about £70 which seems a large sum for just four years of SERPS. During that period I was originally contracted out but then under the rules at the time I had my contributions returned when I left the employer & was therefore put back into SERPS. As far as I am aware at all other times I was contracted out. I haven't liked to ask too many questions as if there has been a mistake it's been in my favour:)

molerat

DBdoobydoo wrote: »

You must have been in SERPS/S2P at some stage otherwise there would not be a figure for a COPE.

When I took my pension last year I was expecting to only get about £10 more than the old state pension as I had thirty years before 2016 & only a couple of years post 2016. I worked abroad for fifteen years & even with buying added years I only had 34 years contributions in total. I'm actually receiving £140/week so must be getting about £10/week from SERPS.

As far as I know I only had a period of four years (1979-1982) when I was in SERPS. My COPE was about £70 which seems a large sum for just four years of SERPS. During that period I was originally contracted out but then under the rules at the time I had my contributions returned when I left the employer & was therefore put back into SERPS. As far as I am aware at all other times I was contracted out. I haven't liked to ask too many questions as if there has been a mistake it's been in my favour:)

Contracted Out Pension Equivalent is a figure derived from when you were contracted out from, so not in, SERPS/S2P.

daddydodo

molerat wrote: »

COPE can be forgotten about for all real life purposes. It was only ever used in the 2016 starting amount calculation of which was the higher amount, the old n/30ths + S2P or the new n/35ths-COPE. This thread is mainly about those where the COPE figure has been ignored in that calculation. What you see is what you will get, your 2 figures show what you can get and what you have already got.

Thank you molerat that's good. However it does seem quite fortunate in my favour as all the little bits of NI contributions re-directed into my separate personal pension means I now have a lumpsum around £60k extra, above and beyond an almost max SP.

xylophone

You must have been in SERPS/S2P at some stage otherwise there would not be a figure for a COPE.

Should read

You must have been contracted out of SERPS/S2P at some stage otherwise there would not be a figure for a COPE

DairyQueen

DBdoobydoo wrote: »

You must have been in SERPS/S2P at some stage otherwise there would not be a figure for a COPE.

...

As far as I know I only had a period of four years (1979-1982) when I was in SERPS. My COPE was about £70 which seems a large sum for just four years of SERPS.

COPE = Contracted-Out Pension Equivalent. The £70 is a notional amount calculated to represent the long periods when you were not participating in SERPS/S2P. This is the opposite of your understanding.

Your long period of contracting-out is therefore accurately represented by a largish COPE value.

DBdoobydoo

Thanks for the corrections. I thought that I had finally understood how my state pension had been calculated but it seems I was wrong:) It now makes sense that the extra £10/week or so that I have above the basic state pension in 2016 was down to four years of SERPS in 1979-1982.

bonnyrigger

Just re-checked my SP forecast today, shows £165.06 current and £168.60 with one more year. There is a COPE of 44.34. My question is if I work for 5 more years (I'm 57 planning to retire at 62), will that COPE figure reduce as I am adding non-contracted out years or am I fundamentally mis-understanding how it works? I'd like to know what my exactly what my "in my hand" SP is going to be not bits paid in other pensions.

DBdoobydoo

bonnyrigger wrote: »

Just re-checked my SP forecast today, shows £165.06 current and £168.60 with one more year. There is a COPE of 44.34. My question is if I work for 5 more years (I'm 57 planning to retire at 62), will that COPE figure reduce as I am adding non-contracted out years or am I fundamentally mis-understanding how it works? I'd like to know what my exactly what my "in my hand" SP is going to be not bits paid in other pensions.

With my newfound understanding of how this all works I think that can now answer you:).

The maximum state pension you can receive is £168.60 (at current values). The COPE figure is irrelevant as it's a theoretical figure calculated to get the transition between the old pension with SERPS/S2P & the new single tier pension.

DairyQueen

bonnyrigger wrote: »

Just re-checked my SP forecast today, shows £165.06 current and £168.60 with one more year. There is a COPE of 44.34. My question is if I work for 5 more years (I'm 57 planning to retire at 62), will that COPE figure reduce as I am adding non-contracted out years or am I fundamentally mis-understanding how it works? I'd like to know what my exactly what my "in my hand" SP is going to be not bits paid in other pensions.

You are not adding 'non-contacted-out years' as SERPS/S2P ended in 2016. The COPE figure represents the notional amount calculated for the years that you were contracted out up to 2016. It is only relevant to the starting amount calculated for you in 2016. Since then, only years of NI contributions/credits will count towards your 2016 starting amount.

According to your forecast, you have 'banked' £165.06 up to the tax year ending Apr 2019. If you earn a full year's NI contributions this tax year then you should hit the max nSP in Apr 2020. In addition, you will have benefits under a DB scheme, or a DC pot, earned from your years of contracting-out.

The COPE value will only change if DWP receive updates from your pre-2016 employers that impact your record prior to 2016. This is affecting some people as DWP have just competed a big reconciliation with employer historical records up to the 2016 starting date.

If the COPE value changes then the 2016 starting amount could also change. If this happens then your NI record, subsequent to the 2016 start date, will be reapplied to the new starting value. This can (and has) affected some people's forecasts since 2016. Some (like me) have seen an increase, others have seen a decrease.

Bottom line is that the forecast can't be 100% relied upon but, following the recent reconciliation, should be much more accurate as anomalies are corrected. The majority of people will not suffer a recalculation of their starting amount and their forecast will not change.

bonnyrigger

Thanks for the responses, think I've got it now.