Another COPE question

jackiemorgan

I am retiring this summer and looked online at my state pension forecast. Am only 57 so will be acting private pension until I'm 67.  My pension forecast says that I will get £175 week based on current NI record but £185.15 week if I pay additional 2 years of NI. I also have a COPE amount listed of £66 week. What I dont understand is how I can be eligible for maximum state pension if I've had a large chunk of time contracted out. Might there be an error in my pension forecast?

jackiemorgan

Like many others I had assumed the £66 would be deducted from my pension. I read the statement re COPE not impacting on your forecast but I read that as meaning that you would still get the forecasted amount but that some of this would be paid as COPE through my private pension.  Would be much clearer if they recorded to something like "this COPE amount is not deducted from the pension forecast shown..." if that is what is meant.

MallyGirl

It catches a lot of people out.

xylophone

You have at some point been a member of a pension scheme (or schemes) that contracted out of the state pension.

However, during this time you will still have been building up a basic state pension.

In addition, if you were contracted out between 2002 - 16, when the Addition State Pension changed from SERPS to S2P, you may still have been receiving some additional pension despite being contracted out.

if you were ever not contracted out you will likely have been building some ASP.


At 6/4/16 (inception of New State Pension), two calculations were done for you to establish your  Starting Amount for NSP  (the higher of the two).

Old Rules

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

New Rules

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

Your COPE was used once only as above.

Presumably you have been employed and paying NI from 6/4/16 up to the present and therefore improving your forecast to the point where  you are very close to the full NSP.

You say that two more years were required - was your forecast up to 6/4/21? 

If so, is it only one more year that is required? Before making any voluntary contributions you should check the exact situation with The Future Pensions Centra.

molerat

jackiemorgan said:

My pension forecast says that I will get £175 week based on current NI record but £185.15 week if I pay additional 2 years of NI.

And those 2 years will be well worth obtaining and there are many ways of doing this via class 1, class 2 or class 3 contributions - employment, self employment, benefits, looking after grandchildren or just buying them.

jackiemorgan

Thanks xylophone. That makes much more sense now. 
Molerat, will definitely get those 2 additional years either by some paid work or just buying them as you say

xylophone

2 additional years

Do check before buying.

by some paid work

Just a "little" job could do the trick, giving you an NI credit.....

https://www.litrg.org.uk/tax-guides/employment/what-national-insurance-do-i-pay-employee

jackiemorgan

Thanks xylophone. Didnt know that