State Pension (COPE)

Skint_yet_Again

I have got a state pension forecast and my estimate to 5/4/2019 is £160.13 with 35 years and if I contribute another 2 years before 5/4/2035 £168.60. I am 51 and am in continuing employment. 

The forecast also mentions I have been contracted out and the COPE amount is £18.90. I don’t quite understand what this is, it says this does not affect my forecast but would be the additional state pension I would have been paid ? However I thought there was now no additional amount and the max state pension is £168.60. 
Sorry if I’m just being thick 🤔 

Dazed_and_C0nfused

The maximum for you (and most people) is £168.60.

Think of COPE as the amount your company pension will be paying (the one you contracted out from).

And in all likelihood you will get a pleasant surprise when this company pension is paid.

Skint_yet_Again

Thanks for explaining. Does anyone know if theCOPE amount is paid in addition to my company pension forecast or will it be included. ? 

Dazed_and_C0nfused

Just ignore it.  You will get your company pension with no mention of it.

xylophone

At 6/4/16, when you had 32 (?) years two calculations were done.
Old Rules
You had at least 30 years NI so
30/30 x BSP (£119.30) + (Additional State Pension - Deduction for Contracting Out)
New Rules
(32/35 x NSP (£155.65)) - Contracted Out Pension Equivalent.
Your starting amount was the higher of the two.
As your SA was less than a full NSP, every qualifying year thereafter would enable you to increase the state pension until you reached the full NSP rate.
You are only 51 and you intend to continue in employment - it seems that you will reach the full rate in a couple of years.
Although you will continue to pay NI (if earning the relevant amount) up to SPA, you cannot improve the forecast beyond a full NSP at whatever rate  that will be when you reach SPA age.
You were "contracted out" at some point in your career and can expect a pension from a former employer/a pension insurance policy etc under the rules applicable to that arrangement.

scottvm

I hope you don't mind me adding my situation to the thread, but I've seen this calculation given in other posts and it doesn't seem to match my figures.

My SP summary forecasts £116.63 with 26 years full contributions to 05/04/2019 (£168.60 is possible if I contribute another 11 years, which would be 37 years in total.)

My COPE estimate is £46.13 a week.

My contribution record comprises:

3 'free' years from age 16-18

2 years working, where I was contracted-in

1 year working where I was in+out (joined DB scheme part-way through year)

19 years contracted-out

1 final year working after contracting-out ended on 5th Apr 2016.

This shows 3, maybe 4, years classed as contracted-in, so although I don't know the figure for my SERP amount, I expect it would be low.

Using the calculations in xylophone's post, NSP would be 26/35 x 155.65 - 46.13 = 69.50 - but my forecast amount is much higher than this.

The calculation for old BSP would be 26/30 * £119.30 - £46.13 = £57.26 plus whatever Additional State Pension might be (but as said, I can't see this being enough to bring the amount up to my Forecast.)

This is what I don't understand - can anyone shed any light? Thanks.

p00hsticks

scottvm said:

The calculation for old BSP would be 26/30 * £119.30 - £46.13 = £57.26 plus whatever Additional State Pension might be (but as said, I can't see this being enough to bring the amount up to my Forecast.)

This is what I don't understand - can anyone shed any light? Thanks.

The COPE amount is only deducted in the NSP calculation - not the old BSP one.  so the old BSP calculation should be

26/30 * £119.30 = £103.39 plus whatever Additional State Pension might be

xylophone

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf
When you read the above, substitute COPE for "rebate derived amount"
Substitute £119.30 for  Basic State Pension figure.
Substitute £155.65 for New State Pension.
 Your starting amount was calculated at 6/4/16.  It was the higher of the old/new calculations.
If you had 26 years at 6/4/16
26/30 x £119.30 + ( ASP - a deduction for contracting out) 
Clearly the amount of ASP after contracting out is important.
Read the link above for calculation of ASP and remember that for years post 2002, (of which you have fourteen) even though contracted out,  moderate earners did accrue some S2P.

scottvm

Thanks for the quick responses, I'll read the doc linked to.

From my initial reading of the replies, it appears I was mistaken in thinking the COPE amount was deducted in old BSP calculation (although there is still some deduction made for contracting-out, presumably much less than COPE and/or ASP may be higher than I had envisaged.) So, it sounds like in my case, the old BSP method gave a higher figure than new SP, and it's this that has been used as my starting amount.