State pension forcast question

laylagirl

HI
Hoping someone can help with a query. I have been on the Government Gateway and got my pension forecast and this is what it says 

Your forecast is £185.15 a week 

It also says like most people you were contracted out  of the state pension and says the following

Your COPE estimate is £92.50 a week

This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government.

In most cases the private pension scheme you were contracted out to:

• will include an amount equal to the COPE amount
• may not individually identify the COPE amount

Could one of you helpful members  please explain what the COPE is, I know it says the COPE wont effect your state pension forecast but do I get it in addition to the £185.15 a week. I just wanted to check this as I always thought if you were in a contracted out pension you wouldn't get full state pension but it looks like my forecast says I will.

For information, I paid into a DB pension scheme from 1978 - 2010 at which point it closed  and since then I am still working for the same company , paying plenty of NI and in a DC, salary sacrifice scheme

Thank you

QrizB

laylagirl said:

Could one of you helpful members  please explain what the COPE is,

COPE is an estimate of the SERPS / SSP / AP pension you would have been entitled to if you hadn't contracted out.

I know it says the COPE wont effect your state pension forecast but do I get it in addition to the £185.15 a week.

You won't get it from the government. You'll be getting a vaguely similar amount from your other pension scheme(s) instead.

I just wanted to check this as I always thought if you were in a contracted out pension you wouldn't get full state pension but it looks like my forecast says I will.

If you hadn't been contracted out, you could be due to receive a "bigger than full" State pension instead.

Linton

COPE is a number used in the calculation of the value of your State Pension on the 5th April 2016.   It represents the SERPs that you did not become entitled to receive because you were contracted out of SERPs.

Since the 6th April 2016 all SP is accumulated under the new state rules and COPE is irrelevant. Under the new pension rules you continue accumulating until you reach the standard value or reach State Pension Age, whichever comes first.

xylophone

Your forecast is £185.15 a week 

Does it also say that you need to contribute National Insurance to reach your forecast?

It appears that by 6/4/16 (inception of NSP), you had in excess of 35 years NI.

Your COPE was used once only  (6/4/16) in establishing your "starting amount" for New State Pension.

Old Rules

 £119.30 (Full Basic because you had at least the max 30 years)) + (Additional State Pension - Deduction for Contracting Out)

New Rules

£155.65 (Full NSP because you had at least the max 35 years) - Contracted Out Pension Equivalent.

Your "starting amount" (in your case given by the old rules calculation) was the higher of the two.

It is likely that your "starting amount" was less than a full NSP so that every full  NI year from 6/4/16 up to that preceding your State Pension Age improves your SP by 1/35 of the  current full new state pension up to (but not exceeding) a full NSP.

The COPE amount is included within the occupational pension provided by your contracted out pension scheme, not paid with the state pension.

See 

https://www.gov.uk/government/publications/new-state-pension-if-youve-been-contracted-out-of-additional-state-pension/the-new-state-pension-transition-and-contracting-out-fact-sheet

Audaxer

Although your forecast is the maximum £185.15 per week, it may be that you still have more years to contribute to get to that figure. Does your forecast also give you a figure for:
"Estimate based on your National Insurance record up to 5 April 2021" ?

laylagirl

Thank you for your answers. It says this forcast is based on the tax record as if the 5th April 2022.  It also says if you continue to earn you will need to continue to pay NI as it funds other things like tge NHS.

Audaxer

laylagirl said:

Thank you for your answers. It says this forcast is based on the tax record as if the 5th April 2022.  It also says if you continue to earn you will need to continue to pay NI as it funds other things like tge NHS.

That sounds like you have qualified for the maximum amount, although I thought it would also specifically say that you cannot improve your forecast, or words to that effect. 

That is a good position you are in, as many retirees with over 40 years NI contributions that were contracted out like myself, still have to make voluntary NI contributions for several years to get to the maximum.

laylagirl

Thank you for your answer. I think it did say you Carnt improve this amount.  It nice to know I will get the maximum as I didn’t expect to with being in the DB scheme. 

xylophone

Thank you for your answer. I think it did say you Carnt improve this amount.  It nice to know I will get the maximum as I didn’t expect to with being in the DB scheme. 

After the individual calculations were done, people  found themselves in one of three positions.

Starting amount equal to NSP/more than NSP/ less than NSP.

Those whose Starting Amount was less than a full NSP had the possibility (under certain circumstances) of improving their position by further contributions/credits up to (but not exceeding) a full NSP.

It appears that you have reached a full NSP but while you are under SPA and working and earning the relevant amount, you will still need to pay NI.

And see (if you continue to work after SPA).

https://www.gov.uk/government/publications/health-and-social-care-levy/health-and-social-care-levy