Good (and short!) explanation of COPE

Marcon

There are lots of queries about COPE cropping up regularly. This is one of the better, not to mention shorter, explanations I could find which might help: https://www.wypf.org.uk/pensioner/all-about-my-pension/contracted-out-pension-equivalent-cope-amount/

MallyGirl

Thanks @Marcon - I have made this sticky

leosayer

Thanks for posting, although I think that the inclusion of the COPE figure in the state pension statements leads more to confusion than being of practical help.

Is this part correct?:

"The COPE amount will be paid as part of a customer’s workplace or personal pension scheme(s). It will usually be part of their total pension benefits under the scheme, and not identified separately." 

Isn't this identified via the GMP amount on DB pension statements?

MallyGirl

I have COPE but not for a DB pension

Marcon

leosayer said:

Thanks for posting, although I think that the inclusion of the COPE figure in the state pension statements leads more to confusion than being of practical help.

Is this part correct?:

"The COPE amount will be paid as part of a customer’s workplace or personal pension scheme(s). It will usually be part of their total pension benefits under the scheme, and not identified separately." 

Isn't this identified via the GMP amount on DB pension statements?

Not quite. Please read the section on my link headed 

Will a customer receive this exact COPE amount?

which will explain.

Snot

leosayer said:

Isn't this identified via the GMP amount on DB pension statements?

My understanding is GMP only related to pre 1997 employment whereas COPE goes to 2016. So with service after 1997 the GMP and COPE values may be completely different.

KimberleyClark

I'm in the process of repaying past years of NI contributions and I've been told the maximum amount of state pension I can achieve is £203 per week as this is the maximum amount currently. My husband retired 5 years ago and his pension is currently £211 per week; I think this is something to do with COPE but I can't find out what or why. I was also contracted out of SERPS for a period of time, so if it is, will I get more than the stated £203? 

p00hsticks

KimberleyClark said:

I'm in the process of repaying past years of NI contributions and I've been told the maximum amount of state pension I can achieve is £203 per week as this is the maximum amount currently. My husband retired 5 years ago and his pension is currently £211 per week; I think this is something to do with COPE but I can't find out what or why. I was also contracted out of SERPS for a period of time, so if it is, will I get more than the stated £203? 

Your husband must have been 'contracted in' and built up enough SERPS/S2P prior to the introduction of the new State Pension in 2016 that his 'starting amount' (the higher of the two amounts calculated under the old and new rules) exceeded the new State Pension maximum - he therefore has the new maximum plus a 'protected amount'.
The new State Pension: How it's calculated - GOV.UK (www.gov.uk)
 
Anyone who reached State Pension Age after the introduction of the nSP and did not have a starting amount that was higher than the maximum as at April 2016 cannot get more than that now. 

marky_b_2

Thanks for the guide but I’m still a little confused.

This is my state pension forecast..

You need to continue to contribute National Insurance to reach your forecast

Estimate based on your National Insurance record up to 5 April 2023

£191.60 a week

Forecast if you contribute another 3 years before 5 April 2040

£203.85 a week

£203.85 is the most you can get

Contracted Out Pension Equivalent (COPE)

Your COPE estimate is £31.48 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.

Does this mean that my state pension payment will be £203.85 - £31.48 = £172.37 per week?

And that I should receive the COPE amount via my civil service pension once I start receiving my state pension? 

I take it the COPE amount wouldn’t be paid before state pension age or would it be paid once I take my work pension?

Thanks

Marcon

marky_b_2 said:

Thanks for the guide but I’m still a little confused.

This is my state pension forecast..

You need to continue to contribute National Insurance to reach your forecast

Estimate based on your National Insurance record up to 5 April 2023

£191.60 a week

Forecast if you contribute another 3 years before 5 April 2040

£203.85 a week

£203.85 is the most you can get

Contracted Out Pension Equivalent (COPE)

Your COPE estimate is £31.48 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.

Does this mean that my state pension payment will be £203.85 - £31.48 = £172.37 per week?

Your COPE estimate is £31.48 a week. This will not affect your State Pension forecast.

And that I should receive the COPE amount via my civil service pension once I start receiving my state pension? 

You will receive an amount in lieu of the COPE estimate.

I take it the COPE amount wouldn’t be paid before state pension age or would it be paid once I take my work pension?

The COPE amount is simply an estimate of how much your State Additional Pension is reduced because you contracted out. Please read the guide in the first post on this thread to understand more.

Hope the above helps, but if not, please have a browse on the very many other threads on this forum which should help to clarify.

Alternatively, just completely ignore the COPE figure - it doesn't impact on the state pension figures shown, or on the amount you will receive from your work pension.  In short, it does little but confuse!

marky_b_2

Yeah Marcon, confusing.

For me what seems to be confusing is that if I qualify for full state pension (unreduced) if I work another 3 years is that the text says my COPE will be paid in my works pension.

Would that not mean that you are getting a double COPE payment, as if I qualify and receive the full state pension but also receive the COPE payment again via my work pension? that’s why I was wondering if the COPE is taken off the state to be paid via work pension.

If I can get the figure of £203 at the moment with 3 more years service then that’s fine.

Cheers