State Pension and COPE

xylophone

This is at the heart of my question.  Is the State Pension forecast the amount of money the government will pay me? If so, why do they confuse the picture by talking about COPE??  

The COPE figure is for your information.

It indicates that at some point you were contracted out of SERPS/S2P.

Most often, the COPE indicates that you were a member of a DB occupational scheme but it was possible to contract out into a money purchase occupational scheme/appropriate personal pension.

See https://techzone.abrdn.com/public/pensions/Tech-guide-contracting-out

The COPE was used once only (6/4/16) in order to calculate your "starting" (foundation)  amount for New State Pension thus

Old Rules

NI years/30 x full Basic State Pension + ( Additional State Pension - Deduction for Contracting Out)

New Rules

(NI years/35 x Full New State Pension) - COPE.

Your starting amount was the higher of the two.

You could have been in one of three positions:-

SA equal to full NSP

SA greater than full NSP

SA less than full NSP

It appears that you were in position three, still employed and under state pension age.

You were therefore in a position to improve your starting amount up to (but not in excess of) a full NSP by further contributions or credits.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

fedupwith_everything

I became aware of the COPE deduction some time ago and have been trying to work out how it effects my circumstances. I am  sure others will be in a similar scenario. I am 61 and have two occupation pensions which started paying when I turned 60. When they recently started to show the COPE the deduction was £34 a week. As it's unlikely I will be paying full years NI in the future I have started to pay voluntary class 3. So far I have made two payments I now have 36 full qualifying years and the deductions on the forecast have reduced by £5.13 a week for every year of contributions. In my mind I assumed that this was a deduction on the COPE in practical terms it is. In the past I have never been able to get a satisfactory answer to my questions. However I now see people continuing to pay full years NI would be blunting their deductions. Now I intend to pay  more voluntary Class 3 years before April when I'm assuming the cost will increase. Now I have read in the following link that the payments are only effective for the years after 2016-17. Can anyone confirm that is the case? Paul Lewis: How to boost your state pension - Saga

Dazed_and_C0nfused

Ignore the COPE amount, it's irrelevant.

What you need to check is what State Pension you have accrued to date.  This is normally shown to 5 April 2021 at the moment.

Each additional (post April 2016) year purchased will increase your State Pension forecast by a maximum of £5.13/week. 

You cannot exceed £179.60/week though so if you get to say £178.90 you might not want to pay voluntary NI for the final year as it will only add £0.70/week to your State Pension.

You are almost certainly a winner under the new system.

And if you post details of your forecast people will explain your options.

german_keeper

fedupwith_everything said:

I became aware of the COPE deduction some time ago and have been trying to work out how it effects my circumstances. I am  sure others will be in a similar scenario. I am 61 and have two occupation pensions which started paying when I turned 60. When they recently started to show the COPE the deduction was £34 a week. As it's unlikely I will be paying full years NI in the future I have started to pay voluntary class 3. So far I have made two payments I now have 36 full qualifying years and the deductions on the forecast have reduced by £5.13 a week for every year of contributions. In my mind I assumed that this was a deduction on the COPE in practical terms it is. In the past I have never been able to get a satisfactory answer to my questions. However I now see people continuing to pay full years NI would be blunting their deductions. Now I intend to pay  more voluntary Class 3 years before April when I'm assuming the cost will increase. Now I have read in the following link that the payments are only effective for the years after 2016-17. Can anyone confirm that is the case? Paul Lewis: How to boost your state pension - Saga

I'm amazed an organisation like Saga has printed that article. It's wrong, he certainly isn't an expert. As Dazed has said the £5.13 per week is extra pension entitlement not reducing COPE deduction because there isn't a deduction. I suggest you completely ignore that article and have a read through this thread instead.

grimespjm

I have a DC Pension due at age 60 which includes a GMP Underpin ( Contracted out of SERPS) payable at 65

Put simply they want to take £38,990 from my DC Pot to fund the underpin so that I can receive £2,392 for life from age 65

Increases by CPI / or 3% whichever is the lower. 

I am currently 59 so would need to live approximately 16.3yrs from 65 to make it worth it, that would take me to 81. 

My gut feeling is to take the Lump Sum. 

I have asked for a transfer value as I would prefer to add it to my SIPP. 

I think it is no longer regarded as a Safeguarded Benefit so shouldn't need to incur the expense of paying for an IFA. 

Has anybody had recent experience of transferring a GMP Underpin?

dunstonh

I have a DC Pension due at age 60 which includes a GMP Underpin ( Contracted out of SERPS) payable at 65

It would have been better to start your own thread rather than tag onto a dead thread on an unrelated subject.  

I am currently 59 so would need to live approximately 16.3yrs from 65 to make it worth it, that would take me to 81. 

your figures are wrong.  Breakeven will be much earlier than that.  Even using your incorrect figure, its still before average life expectancy.

I think it is no longer regarded as a Safeguarded Benefit so shouldn't need to incur the expense of paying for an IFA. 
Has anybody had recent experience of transferring a GMP Underpin?

it is a safeguarded benefit.

xylophone

I think it is no longer regarded as a Safeguarded Benefit so shouldn't need to incur the expense of paying for an IFA. 

Has your provider told you this?

See

https://forums.moneysavingexpert.com/discussion/6046775/dc-with-a-gmp-underpin