Good (and short!) explanation of COPE

molerat

green.lander_2 said:

Hello all, 

I still cannot get my head around this checking the government site it says 47 years of contributions and your COPE estimate is £73.58 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 with a estimate of £203

My old private pension company does know about COPE so how can i find out where this will come from.

Thanks

COPE is not a real amount,  an equivalent amount should be paid within the pension that you were contracted out into.  It will not be separately defined and it could be more or less depending on the type of pension and any investments made with those contributions.

hornetgirl

Ok, so I was contracted out for a job I had from 1981 - 1990. I received my associated DB pension when I turned 60. Does this mean that my COPE amount is already included in that or will it increase when I reach state pension age in July 2026, or is it not as simple as that?

molerat

hornetgirl said:

Ok, so I was contracted out for a job I had from 1981 - 1990. I received my associated DB pension when I turned 60. Does this mean that my COPE amount is already included in that or will it increase when I reach state pension age in July 2026, or is it not as simple as that?

Yes, the theoretical COPE amount is already included in that DB pension.  When you reach state pension age another thing, GMP, may come into play which would vary (reduce !) the rate of increase on different parts of the pension.

Bod_1234

Despite all the links claiming to provide simple explanations, none of them really help.  The government are saying I can't improve my tax record anymore, with 37 full qualifying years, contrary to that every website seems to suggest I need carry on paying in to reduce the COPE amount which will be deducted, as it will be paid from my other pension source.

Essentially, my state pension will be the full amount MINUS the COPE amount. (The COPE amount coming from my private pension), essentially meaning my private pension value isn't really what it is either.

molerat

Bod_1234 said:

Despite all the links claiming to provide simple explanations, none of them really help.  The government are saying I can't improve my tax record anymore, with 37 full qualifying years, contrary to that every website seems to suggest I need carry on paying in to reduce the COPE amount which will be deducted, as it will be paid from my other pension source.

Essentially, my state pension will be the full amount MINUS the COPE amount. (The COPE amount coming from my private pension), essentially meaning my private pension value isn't really what it is either.

You are completely misunderstanding the situation, COPE is not deducted from your pension amount.  COPE was only ever used when calculating your 2016 new pension starting amount.  At that point you received the higher of what you had already accrued under the old system, which already had a contracted out calculation made on the S2P, or your new scheme calculation with the COPE deduction. The only difference is that COPE is an up front shown amount. Post 2016 you were able to add to that amount.  You paid a lower amount of NI pre 2016, COPE simply means you do not receive what you didn't pay for.  What you didn't pay in NI you effectively paid into your contracted out pension and will get what that produced. If your forecast states that at April 2023 you had £203.85 then that is what you will get, you do not need to make any more contributions. Anyone retiring after April 2025 with 30 pre 2016 years and making full post 2016 contributions will receive a full new pension.

A post you made on a different thread

It does state "You cannot improve your forecast any more.".

I'm still really confused as to why I need to know and care about this £34.73.   I guess it could be 4 things:

1. The government will deduct £34.73 from my  £203.85 every week, as I took that money and put it elsewhere.
2. The government are going to pay me £203.85 every week, but take £34.73 out of my private pension.
3. If I hadn't contracted out, my weekly payment would have been £203.85 + £34.73
4. It's a totally pointless figure that needs removing from the pension website, as it confuses everyone.

1. Wrong

2. Wrong

3. Wrong

4. Wrong

You will receive £203.85, as simple as that.  You don't need to care about the £34.73 but it is essential for working out entitlements and the viability of making pre 2016 top ups.  Just because you don't understand it doesn't mean it is of no use.

warrenb

Yes it is all very confusing but basically boils down to this.

If the big Green box at the top of the screen says a figure, then this is what you will get.
The reason some people who contracted out will still get the maximum is because at some point they contracted back in.

So for example myself can get £203.
I was contracted out and have a COPE of £40.
I was then contracted back in and this is the reason my forecast is the maximum £203.
As this is made up of the old state pension plus anything I would have got from SP2 (SERPS), or the new state pension which ever is higher.
COPE is basically an algorithm that calculates the amount of NI you didn't pay and how much it would pay you if it were invested in a private pension. (It is a mathematical guess).

The key is read the big green box, that is the minimum you will get.

For number of qualifying years, this is where it can get confusing, yes I was contracted out but have 37 years of full contributions. The reason for this is that i was earning enough for all of the years I was contracted out to meet the level of payment to qualify for a full year even with the reduction of NI payments. (This minimum rate is now used to buy NI Credits so you can see how much they were for each year).

You have:

• 37 years of full contributions
• 14 years to contribute before 5 April 2037

molerat

The key is read the big green box, that is what you will get.

It is not necessarily what you will get. The big green box is what you could get provided you add the necessary, if any, additional years going forward as quoted on the forecast.  The only time it is what you will get is if it is the one and only amount mentioned in the forecast.  You may in some circumstances be able to get more than the green box amount even if it is the full £203.85

warrenb

molerat said:

The key is read the big green box, that is what you will get.

It is not necessarily what you will get. The big green box is what you could get provided you add the necessary, if any, additional years going forward as quoted on the forecast.  The only time it is what you will get is if it is the one and only amount mentioned in the forecast.  You may in some circumstances be able to get more than the green box amount even if it is the full £203.85

I think what I am trying to get across is that the green box shows your forecast and will have no deductions for COPE. Go with the green box for safety.

deeleys

I’ve been looking into what to do with my pensions as I’m 55 next year. I came across someone over on another site who reckons you can claim back the invested COPE amount by contacting the National Insurance help line or the pension tracking service and then the provider. There have been a few people in the comments who say they’ve been able to claim and others say theirs had already been transferred to their private pension. I’m going to be looking into this further as I’ve got a COPE amount.

Sarahspangles

deeleys said:

I’ve been looking into what to do with my pensions as I’m 55 next year. I came across someone over on another site who reckons you can claim back the invested COPE amount by contacting the National Insurance help line or the pension tracking service and then the provider. There have been a few people in the comments who say they’ve been able to claim and others say theirs had already been transferred to their private pension. I’m going to be looking into this further as I’ve got a COPE amount.

I’m not sure ‘claim back’ is the right way to describe this.

It’s obvious from other posts on this forum that many people don’t understand/remember that at some point in their working life they were contributing to both the state pension and a workplace/personal pension. They eventually get a reminder when checking their state pension forecast. The COPE amount is provided in the forecast to help the individual understand how the state pension part of their retirement income was built up.

It sounds as if people on the forum you’re using are only now realising they have other pension provision and are tracking this down. The COPE amount then isn’t some separate pot, it’s just an estimate of an amount that ought to be provided by their personal pension.

So it’s more a case of ‘getting in contact with my personal pension’ and then deciding when to put that pension into payment. It wouldn’t normally be necessary to have to trace that pension if they’d kept basic records and notified the provider of changes of address.