COPE reduction issue from SP

Frey_Bentos

My state pension is estimated to be £185.76 a week with a COPE reduction of £21.08 a week.
I was surprised to see any reduction as I have always without fail, my entire career opted to stay in SERPS and paid class A NI.
On raising a query with the DWP, they outlined supposed dates when I did not pay class A contributions. They told me to go and find payslips and check what contributions id made.
I went away and investigated and the dates were a LONG time ago so paperwork was scarce but fortunately I found some wage slips that covered several of the dates which confirmed I had indeed paid Class A contributions and was not opted out.
On presenting this information to the DWP, they told me basically tough luck, their records showed my employer had NOT paid class A for those dates and that I should contact my ex employer of that period (who went out of business 9 years ago).
So I seem unjustly stuck with a COPE amount. I have 39 years of contributions into my SP and the online site says I cannot do anything to improve my forecast.
I intend working for another couple of years - why cant these extra years NI reduce my COPE deduction?
Its a tough pill to swallow knowing I did pay the class A amount to begin with.

molerat

Were you in an occupational pension scheme at any time ?

COPE will not be deducted from the amount shown, what you see is what you will get. You were already over the maximum new pension at the outset so post 2016 years cannot add to the pension.  COPE would have no effect on that amount but there would have been a contracted deduction from your S2P.

dunstonh

At any time during your working life, were you a member of an occupational pension?    DB schemes were usually contracted out as were many Occupational DC schemes.

I intend working for another couple of years - why cant these extra years NI reduce my COPE deduction?

Its not a deduction.    And generally, your worst years are replaced by your best years (simplified way of saying it).  You may already have covered it.

xylophone

I went away and investigated and the dates were a LONG time ago so paperwork was scarce but fortunately I found some wage slips that covered several of the dates which confirmed I had indeed paid Class A contributions and was not opted out.

"Contracted Out"?

https://www.litrg.org.uk/latest-news/news/170607-new-state-pension-–-did-you-pay-contracted-out-nic

Checking if you were contracted-out

Many people may not have realised that they were contracted-out. One way to check would be to look at an old payslip – one from before April 2016. If it shows the letter “D” or “N” on the National Insurance line then this means you were contracted-out. Letter “A” would mean you were not contracted-out.

If you have or previously had a married woman’s reduced rate election and were contracted-out your payslip would show the letter “E”. Letter “B” would mean you were not contracted-out.

Have you tried the link  in this post for full details concerning your NI history? See

https://forums.moneysavingexpert.com/discussion/comment/78331478/#Comment_78331478

With regard to COPE ("Rebate Derived Amount)" calculation see

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf

How many years NI did you have at 6/4/16?

jamesd

There are three critical pieces of information in your post:

1. "the online site says I cannot do anything to improve my forecast" which means that you have already reached the maximum that it's possible to achieve in your circumstances.
2. The full new State Pension is £179.60 per week. "My state pension is estimated to be £185.76 a week" so you're at least already over the core amount. No years from April 2016 onwards can increase this amount once it's reached the £179.60 so it's only those earlier years to consider.
3. "a COPE reduction of £21.08 a week" is not quite right. The COPE amount is not deducted from the state pensions, it's an estimate of what a contracted out pension might pay you and you can completely ignore it. £185.76 plus triple lock on most of it and inflation on the bit above £179.60 a week is what you will get paid to you.

What this means is that those missing years are going to reduce the earnings-related portion of the state pension that you were accruing for work before April 2016. And that's a real loss to you.

Next step for you is getting your full NI history using the details at the link provided by xylophone. That should get you sufficient evidence to have your record updated. Any improvement will be backdated if you get the pension in the meantime. DWP isn't the keeper of those records, it's HMRC and the communication between them can be imperfect sometimes.

Frey_Bentos

Thank you guys, I did realise im fortunate enough to have over the basic SP amount, it is the earnings related portion that has been hit and over £80 a month loss for the rest of my life due to errors made by others is where id like to focus. 
I have filled in the info as per the recommended link so I can get a full record and will have to take a very close look at all the information for the errors. 
I was in a DB scheme in the early part of my career but I absolutely remember with clarity having an interview with the financial manager there who asked me to make a decision about opting out of SERPS and I categorically declined the opt out and signed to stay in despite it meaning my take home pay was lower as a result.
So actually I havent just lost the COPE amount, I have taken less money home too, albeit minute amounts. 

dunstonh

I was in a DB scheme in the early part of my career but I absolutely remember with clarity having an interview with the financial manager there who asked me to make a decision about opting out of SERPS and I categorically declined the opt out and signed to stay in despite it meaning my take home pay was lower as a result.

DB schemes did not normally give a choice and nearly all were contracted out.

That would be the first place to investigate.

xylophone

I was in a DB scheme in the early part of my career but I absolutely remember with clarity having an interview with the financial manager there who asked me to make a decision about opting out of SERPS and I categorically declined the opt out and signed to stay in despite it meaning my take home pay was lower as a result.

I have never come across being able to opt out of contracting out if a member of a DB Scheme.

Are you saying that you refused membership of the scheme and have no entitlement to a pension from the scheme?

Marcon

dunstonh said:

I was in a DB scheme in the early part of my career but I absolutely remember with clarity having an interview with the financial manager there who asked me to make a decision about opting out of SERPS and I categorically declined the opt out and signed to stay in despite it meaning my take home pay was lower as a result.

DB schemes did not normally give a choice and nearly all were contracted out.

That would be the first place to investigate.

Absolutely - not least because (technically) it was your employment that was contracted out, and this should have been stated in your contract. 

OP, can you remember the exact name of your employer at the time you had this interview and the rough dates of your employment? It would have been exceptionally unusual to have had any choice and even more unusual for someone young to have (a) turned down taking home higher pay and (b) even having a clue what the whole thing was about (particularly as contracting of SERPS was very much the done thing for under-40s, which is why there was such a plethora of people doing so using personal pensions if their employer's scheme didn't contract them out). What made you choose to swim against the tide?

p00hsticks

Frey_Bentos said:

it is the earnings related portion that has been hit and over £80 a month loss for the rest of my life due to errors made by others is where id like to focus. 

I'm not an expert in this area but I'm not sure that it's correct to assume that the entire amount quoted as a COPE figure would directly correspond to the additional pension you would have accrued if your record had you as contracted in for the same period....

Dazed_and_C0nfused

p00hsticks said:

Frey_Bentos said:

it is the earnings related portion that has been hit and over £80 a month loss for the rest of my life due to errors made by others is where id like to focus. 

I'm not an expert in this area but I'm not sure that it's correct to assume that the entire amount quoted as a COPE figure would directly correspond to the additional pension you would have accrued if your record had you as contracted in for the same period....

Agree, I'd be interested to know how the op how at a supposed loss of £80+/month