Voluntary contributions 22 February at 1:41AM in Pensions, annuities & retirement planning 8 replies 226 views

mrsmac59

Re MSE show last night.Can anyone guide me I am pretty sure It will  not  be worth my while paying extra to boost my state pension but want to be sure I have 45 full years in up to 20/21 tax year.I am short 21/22, and current tax year I have no contributions.I have 2 years 4 months  before I can  claim state pension.
Advice please

eskbanker

Assuming you've checked your forecast at https://www.gov.uk/check-state-pension, it should be clear from that whether you've already reached your maximum entitlement, i.e. if the figure based on contributions up to 2022 is the same as the maximum you can achieve?

gamston

as above check your state pension forecast, it will tell you what will get, what extra you can get and how much it will cost
i needed 6 yrs extra payments to get my max pension
it cost £4.9K getting extra £25 after tax a week, ( before the pension rise comes in) so it takes 3 1/2 yrs to get my money back

mrsmac59

eskbanker said:

Assuming you've checked your forecast at https://www.gov.uk/check-state-pension, it should be clear from that whether you've already reached your maximum entitlement, i.e. if the figure based on contributions up to 2022 is the same as the maximum you can achieve?

Es it does say I've reached maximum and I can't  increase it any more.
Do you know what  it means by COPE? It also says my pension isn't affected by this I would just like to understand it.!!!
Thanks to Martin lines to pension forecast are busy  !!!!

molerat

mrsmac59 said:

eskbanker said:

Assuming you've checked your forecast at https://www.gov.uk/check-state-pension, it should be clear from that whether you've already reached your maximum entitlement, i.e. if the figure based on contributions up to 2022 is the same as the maximum you can achieve?

Es it does say I've reached maximum and I can't  increase it any more.
Do you know what  it means by COPE? It also says my pension isn't affected by this I would just like to understand it.!!!
Thanks to Martin lines to pension forecast are busy  !!!!

COPE is an amount that was deducted from your 2016 new scheme starting amount to cover your lower NI payments when contracted out (and that / a similar amount may / should be part of your contracted out pension you are receiving but it won't be shown anywhere ). If you have a large COPE it likely means your starting amount was based on the old scheme anyway as that was higher.  It does not affect your pension as it is already factored into the amount shown, what you see is what you get.

p00hsticks

mrsmac59 said:

eskbanker said:

Assuming you've checked your forecast at https://www.gov.uk/check-state-pension, it should be clear from that whether you've already reached your maximum entitlement, i.e. if the figure based on contributions up to 2022 is the same as the maximum you can achieve?

Es it does say I've reached maximum and I can't  increase it any more.
Do you know what  it means by COPE? It also says my pension isn't affected by this I would just like to understand it.!!!
Thanks to Martin lines to pension forecast are busy  !!!!

COPE stands for 'Contracted Out Pension Equivalent' and indicates that at some point prior to 2016 you would have been contracted out of SERPS / Additional State Pension (and therefore paid a lower rate of NI) because you were enrolled in a private/employer pension of some sort.

It was used in the 'new rules' calculation when determining your 'starting amount' of new state pension as at April 2016, but after that can be ignored, and does not have any impact on your forecast amount.

It does indicate that there is potentially an employers pension out there for you as well as the state pension.

pinnks

COPE is the Contracted Out Pension Equivalent and relates to the fact that you contributed to a workplace pension that was "contracted out" of the second state pension (State Earnings Related Pension Scheme - SERPS - later called the State Second Pension - S2P). A contracted out scheme guaranteed to pay at least as much as you would have received under SERPS etc.  If you were contracted out you paid a lower percentage of NIC to reflect the fact that you were not contributing to the state scheme. Contracting out ended with the introduction of the new state pension in 2016.  Your workplace pension continues, of course, but the NIC discount ended.

On reaching state pension age under the old rules you would have received your basic state pension plus your workplace pension but no additional pension based on SERPS etc as it was reduced to nil by the Contracted Out Deduction (COD) to reflect the fact that you were contracted out.

The calculation of your starting amount to transfer you from the old to the new rules in 2016 has to take account of the fact that you were contracted out and this is achieved by deducting the amount of COPE. Once your starting amount has been calculated, you add £5.29 to that for each full NI year from 2016/17 onwards until you either reach the new maximum of £185.15, or stop paying NI because you reach state pension age. 

At pension age you will receive the new state pension and, of course, your workplace pension.

eskbanker

mrsmac59 said:

eskbanker said:

Assuming you've checked your forecast at https://www.gov.uk/check-state-pension, it should be clear from that whether you've already reached your maximum entitlement, i.e. if the figure based on contributions up to 2022 is the same as the maximum you can achieve?

Es it does say I've reached maximum and I can't  increase it any more.
Do you know what  it means by COPE? It also says my pension isn't affected by this I would just like to understand it.!!!
Thanks to Martin lines to pension forecast are busy  !!!!

It's undoubtedly unhelpful that many people rush to pick up the phone just to ask questions rather than reading the wealth of information available online, so worth perusing the likes of:

https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service

https://www.moneysavingexpert.com/savings/state-pensions/

mrsmac59

pinnks said:

COPE is the Contracted Out Pension Equivalent and relates to the fact that you contributed to a workplace pension that was "contracted out" of the second state pension (State Earnings Related Pension Scheme - SERPS - later called the State Second Pension - S2P). A contracted out scheme guaranteed to pay at least as much as you would have received under SERPS etc.  If you were contracted out you paid a lower percentage of NIC to reflect the fact that you were not contributing to the state scheme. Contracting out ended with the introduction of the new state pension in 2016.  Your workplace pension continues, of course, but the NIC discount ended.

On reaching state pension age under the old rules you would have received your basic state pension plus your workplace pension but no additional pension based on SERPS etc as it was reduced to nil by the Contracted Out Deduction (COD) to reflect the fact that you were contracted out.

The calculation of your starting amount to transfer you from the old to the new rules in 2016 has to take account of the fact that you were contracted out and this is achieved by deducting the amount of COPE. Once your starting amount has been calculated, you add £5.29 to that for each full NI year from 2016/17 onwards until you either reach the new maximum of £185.15, or stop paying NI because you reach state pension age. 

At pension age you will receive the new state pension and, of course, your workplace pension.

My COPE estimated at £2.82 per week.Over my working life I have been at stay at home mother,worked part time and full time and latterly for the Nhs for10 years where I have contributed to their pension scheme.
Many thanks for all answers.Much appreciated.