COPE Pension

Silverbird65

My hubby was due to retire at 65 this year but govt moved him on to 66. His COPE ammt is covered by GMP only small ammt. Wonder whether to take it this year as offered with lump sum or leave to next yr and re calculate. The amount is £1417  with 5000 tax free payt. Or £275 extra per yr as annuity. It would take 20 odd  to even out. Good job decision not over mega bucks👍

dunstonh

My hubby was due to retire at 65 this year but govt moved him on to 66. 

The movement from 65 to 66 on the state pension occurred a long time ago.    The Government didn't change the date your husband can retire.  They just changed the date they pay the state pension.   He can still retire this year if he wants.

Wonder whether to take it this year as offered with lump sum or leave to next yr and re calculate. The amount is £1417  with 5000 tax free payt. Or £275 extra per yr as annuity.

Can you clarify what type of pension it is and the terms of the annuity? (indexation, death benefits etc)

Silverbird65

It's just a transfer pension plan from the 1980s we haven't added to it it's just sat there. It's some in shares some in with profits fund(useless). They made 3 options 1. 1416 +annuity 285 per annum with spouse at death 708
2. 1416+252pa spouse 834 at death
3.1416 spouse 708pa  + lump sum 5542.
The GMP will grow3%per yr and annuity will not grow.
If he delays till next year they will recalculate.
Thanks

Silverbird65

His forecast is £185pw 808pm
9699pa he has full contributions for 49 or more yes. His COPE is £17.13. not public service . Private company scheme . I think he was contracted out for about aug 1988 to march 92. GMP accrued pre 1988 nil

Post 1988 157.05pa
GMP revalued

Pre April 88 0pannum
Post april88 1374 pa

Revaluation rate 7.50%
Totally confused by all the figures

Thanks

Silverbird65

Sorry cannot see your response. The pension was defined plan and when my hubby left it was put in a transfer plan and left. He never took a personal pension as always changing jobs or working for agencies. He was a trucker.

xylophone

It's just a transfer pension plan from the 1980s 

Presumably a S32 policy holding a post 88 GMP which has revalued to £1416 ( and will increase in payment by up to 3% CPI annually) plus a small excess over GMP which will not increase in payment?

 3 options 

1. 1416 +annuity 285 per annum with spouse at death 708

2. 1416+252pa spouse 834 at death

3.1416 spouse 708pa  + lump sum 5542.

The £253/£285 does not increase in payment and will steadily lose value to inflation?

if the lump sum is taken, it can be taken and spent to meet current needs (so that he could consider increasing his contributions to any current pension plan) or could be invested through an ISA?

Does your husband intend to retire from paid work on turning 65?

What exactly does his State Pension Forecast say? 

Silverbird65

He is retiring at 66 next year he might reduce hrs this yr. His forecast says 185.89 per week

808 per month

9699.47 per yr

COPE ammt 17.13 
Which will be covered by GMP 1417.
He isn't in any pension scheme

So ISA savings which we have built up over the years.
Thanks

xylophone

185.89 per week

Which is just a fraction over the current full new state pension ( which means that his starting amount would have been just a fraction over full NSP calculated 6/4/16) so although he will have been paying NI post 6/4/16 (if earning the relevant amount), he will not have improved his forecast. It will have been revaluing under triple/double lock (as to £155.65 of his SA) and CPI on the small remainder.

He isn't in any pension scheme

Had he considered opening a personal pension? 

Silverbird65

How come his post 2016 contributions mean nothing. He will be retiring next year so ne need personal pension

Thanks

xylophone

How come his post 2016 contributions mean nothing. 

NI pays for  many services  not just pensions.

It would appear from his forecast that at the inception of new state pension, his "starting (foundation) amount" was already (albeit only slightly) in excess of a full new state pension (which was £155.65 at inception, higher than the estimate given in link below)

See 

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

Two calculations were done at 6/4/16 to establish his starting amount.

Old Rules

NI years/30 (max) x Full Basic State Pension (£119.30) + (Additional State Pension - Deduction for Contracting Out).

New Rules

NI years/35 (max) x Full NSP (£155.65) - COPE.

His starting amount was the higher of the two and seems to have been the Old Rules amount - it would appear to have been  some few pence over £155.65.

Therefore  see Jenny (page 8) in link. 

 He will be retiring next year so ne need personal pension

It might be worth considering from the point of view of tax relief?

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

Silverbird65

For 1yr.?
Thanks