Sorry another COPE/SERPS question

grumpsthegit

Hi, I contracted out of SERPS way back when (cannot remember exactly when, but a long time ago). I think I may have contracted back in also at a later date - sorry I was young and not focused on Pensions when this happened so unsure.

My question is: I have signed into the HMRC online services and checked my State pension forecast and it states I will qualify for the full New State Pension - which is great news. However I did read that if you contracted out of SERPS you may get a reduced State pension. So I did contract out but it looks like I should still get the Full State pension. Does this sound correct? Am I just fortunate (this never happens). I am not arguing against it, but I don't want to make plans and then get a nasty surprise when I start drawing the state pension and find it is a reduced amount.

Many thanks 

QrizB

Yes, you can get a full NSP even if you contracted out. It's more likely if you have longer to work after 2016 (so people who reached SPA in the late 201x period are less likely to manage it but if you reach SPA in the 2020s or 2030s it's much more likely).

molerat

The only thing your contracting out affected was the starting amount at April 2016, even then it did not "reduce" the new pension below what you had already accrued under the old pension where any additional pension was already reduced by contracting out. It does not affect your ability to achieve the full new pension providing you have enough post 2016 years to top up.

grumpsthegit

Thanks Qriz and molerat that is good to hear - I feel re-assured now. Seems like the decision to Opt out was a good one as I now have a 60K contracted out pot on top of my State Pension :-) (all i need now if for Bonds to recover in the next few years   !!!)

eastcorkram

grumpsthegit said:

Thanks Qriz and molerat that is good to hear - I feel re-assured now. Seems like the decision to Opt out was a good one as I now have a 60K contracted out pot on top of my State Pension :-) (all i need now if for Bonds to recover in the next few years   !!!)

Does your forecast show a COPE figure?

grumpsthegit

eastcorkram said:

grumpsthegit said:

Thanks Qriz and molerat that is good to hear - I feel re-assured now. Seems like the decision to Opt out was a good one as I now have a 60K contracted out pot on top of my State Pension :-) (all i need now if for Bonds to recover in the next few years   !!!)

Does your forecast show a COPE figure?

No it does not but I get a yearly statement from the pension company the contracted out payments went to so I know what is in there.

molerat

grumpsthegit said:

eastcorkram said:

grumpsthegit said:

Thanks Qriz and molerat that is good to hear - I feel re-assured now. Seems like the decision to Opt out was a good one as I now have a 60K contracted out pot on top of my State Pension :-) (all i need now if for Bonds to recover in the next few years   !!!)

Does your forecast show a COPE figure?

No it does not but I get a yearly statement from the pension company the contracted out payments went to so I know what is in there.

The COPE is not on the front page but in a click link in the "You've been in a contracted-out pension scheme" bit.

grumpsthegit

molerat said:

grumpsthegit said:

eastcorkram said:

grumpsthegit said:

Thanks Qriz and molerat that is good to hear - I feel re-assured now. Seems like the decision to Opt out was a good one as I now have a 60K contracted out pot on top of my State Pension :-) (all i need now if for Bonds to recover in the next few years   !!!)

Does your forecast show a COPE figure?

No it does not but I get a yearly statement from the pension company the contracted out payments went to so I know what is in there.

The COPE is not on the front page but in a click link in the "You've been in a contracted-out pension scheme" bit.

Ahh yes - £40.56 per week estimate.

xylophone

What exactly does your forecast say?

Does it indicate that you still need to contribute to reach your forecast?

At 6/4/16, your "starting amount" for new state pension was calculated as the higher of

Old Rules

NI qualifying years/30 x £119.30 (Full Basic) + (Additional State Pension - Deduction for Contracting Out)

New Rules

{NI qualifying years/35 x £155.65 (Full NSP)} - Contracted Out Pension Equivalent. 

If your starting amount was under a full NSP, there was the possibility of increasing it up to (but not in excess of) the full amount by contributions or credits.

https://assets.publishing.service.gov.uk/media/5a7a21fd40f0b66a2fc00201/single-tier-pension-fact-sheet.pdf was produced pre introduction.

grumpsthegit

Hey Xylophone - Copy paste from gov.uk:

You can get your State Pension on ###########

Your forecast is £203.85 a week, £886.38 a month, £10,636.60 a year

Your State Pension forecast is provided for your information only and the service does not offer financial advice. When planning for your retirement, you should seek professional advice.

Your forecast

• is not a guarantee and is based on the current law
• is based on your National Insurance record up to 5 April 2023
• does not include any increase due to inflation

£203.85 is the most you can get

You cannot improve your forecast any more.

If you’re working you may still need to pay National Insurance contributions until ######### as they fund other state benefits and the NHS.

xylophone

Then you have reached full NSP and it will not increase via  future contributions.

It will revalue each year under (currently) the "Triple Lock".