State Pension & Historical Contracted out Period

FIREmenow

pinnks said:

FIREmenow said:

xylophone says:

You could ask what your COPE was if you are particularly concerned but you have already accrued a state pension in excess of the full amount.

If you really want to know, when you are logged into your state pension forecast, you should see your COPE at this link: https://www.tax.service.gov.uk/check-your-state-pension/account/cope

If the link doesn't work r first time, double check you are logged in, and then click it again.

As said, it doesn't really matter as you definitely have (more than) enough years.

Thanks for that.  Since they removed access to COPE I have been trying to find a way to see it again.  If you asked me, I would say I tried that link but it didn't work, but I have just tried again and, yey, I see my COPE again.  Who know what I clicked on previously, lol 

That's good! I dug back through my browser history to find it when we realised the link from the forecast had been redirected to a general COPE info page. Definitely worth a screen shot of your COPE in case they take that page down altogether!

Shaky1105

FIREmenow said:

xylophone says:

You could ask what your COPE was if you are particularly concerned but you have already accrued a state pension in excess of the full amount.

If you really want to know, when you are logged into your state pension forecast, you should see your COPE at this link: https://www.tax.service.gov.uk/check-your-state-pension/account/cope

If the link doesn't work r first time, double check you are logged in, and then click it again.

As said, it doesn't really matter as you definitely have (more than) enough years.

Thanks @FIREmenow I've just checked using that link and my COPE amount is £24.21.

Shaky1105

dunstonh said:

 there isn't any reference to a COPE amount on my forecast so do you think it would be prudent to get in touch with the Pensions Service or is there no need ?

COPE has been removed as it no longer served any purpose and was creating confusion.

wouldn't this mean that I still have to contribute 5 years to get the 35 years required for the maximum state pension ?

Where are you getting 35 years from?   35  years doesn't apply to you. it only applies to people who build up entitlement fully under the NSP.   Not the BSP/SERPs/S2P period.   Most are still finding circa 40 something years is still typical.

Also, where does the forecasted figure come from as that is more than the maximum amount ? 

Your contracted in years before that was abolished can increase it higher then the NSP.  Your contracted out years, reduce it.   So, depending on that balance, you could be higher or lower.  Plus, your best years can replace your worst years once you exceed qualification.

Thanks @dunstonh I wrongly presumed that because I am eventually going to be claiming the NSP, the 35 years period applied. So if I'm thinking this correctly, with my COPE amount being £24.21 and my current full NSP forecast being £233.65, if I were to start claiming the NSP now (I aren't as I've got the best part of 8 years to wait until I'm 67) I would receive £233.65-£24.21=£209.44, therefore meaning I still need to contibute some NI years to receive the full NSP ?

Or is my head scrambled that much that I'm still working it out wrong 🤦‍♂️

xylophone

Or is my head scrambled that much that I'm still working it out wrong 🤦‍♂️

Read my posts above again.

Dazed_and_C0nfused

Shaky1105 said:

dunstonh said:

 there isn't any reference to a COPE amount on my forecast so do you think it would be prudent to get in touch with the Pensions Service or is there no need ?

COPE has been removed as it no longer served any purpose and was creating confusion.

wouldn't this mean that I still have to contribute 5 years to get the 35 years required for the maximum state pension ?

Where are you getting 35 years from?   35  years doesn't apply to you. it only applies to people who build up entitlement fully under the NSP.   Not the BSP/SERPs/S2P period.   Most are still finding circa 40 something years is still typical.

Also, where does the forecasted figure come from as that is more than the maximum amount ? 

Your contracted in years before that was abolished can increase it higher then the NSP.  Your contracted out years, reduce it.   So, depending on that balance, you could be higher or lower.  Plus, your best years can replace your worst years once you exceed qualification.

Thanks @dunstonh I wrongly presumed that because I am eventually going to be claiming the NSP, the 35 years period applied. So if I'm thinking this correctly, with my COPE amount being £24.21 and my current full NSP forecast being £233.65, if I were to start claiming the NSP now (I aren't as I've got the best part of 8 years to wait until I'm 67) I would receive £233.65-£24.21=£209.44, therefore meaning I still need to contibute some NI years to receive the full NSP ?

Or is my head scrambled that much that I'm still working it out wrong 🤦‍♂️

I honestly don't know how you arrived at that conclusion 🤔.

If you have already accrued £233.65 you will receive £233.65.

You cannot improve your £233.65 but you will benefit from two sets of annual increases.  The triple lock on the standard amount (currently £221.20) and (I think) CPI on the £12.45 above that.

FIREmenow

Shaky1105 said: 

Or is my head scrambled that much that I'm still working it out wrong 🤦‍♂️

It isn't the easiest thing to get your head around!

Essentially (as xylophone explains in their detailed post), in 2016, two calculations were made using your National Insurance record and pension accrued up to that point to determine weekly pension in £s. One used old state pension rules, and one used new state pension rules.  The COPE amount was deducted during those calculations and is never used or deducted again after that. The only reason you would need it now is for one of the resident experts here to help confirm that calculation for you. But the COPE is not lost forever as that figure represents what would have been going into your workplace pension instead whilst you were contacted out.

Whichever calculation gave you a higher weekly pension became the starting point amount for new state pension, for future qualifying NI years to build on up to the maximum.

 I think your calculation under new rules would have been:
(B) {NIQY (max 35)/35 x Full NSP (£155.65)} - Contracted Out Pension Equivalent.
((35/35) x £155.65) - £24.21 = £131.44

But your amount under old rules must have been higher, so your starting point was max new state pension (£155.65) plus a protected payment to bring it up to your old state pension calculation value.  This ensured that you were not any worse off when the new state pension came in. 

So you already had enough qualifying years back in 2016 and no contribution since then has changed this. State pension is then uplifted each year to try to keep up with inflation as others have explained. But like everyone else you still need to pay NI until state pension age and this pays for lots of other things. 

When you get your pension letter, it will break down your weekly amount into the NSP and protected payment parts, and that's worth hanging on to as they don't seem to show the split after that (from my dad's experience). In some cases, a spouse can inherit part of the protected payment (but not NSP).

The bottom line is that you've done your bit, you will get more than max new state pension per week, and all you need to do now is let time march on to your state pension age!

(But if you really want to buy some more years, you can buy me some  )

Shaky1105

Thanks very much guys for all the detailed explanations. My brain has finally managed to let this sink in ! The problem is is that I'm normally a bit of a pessimist so I always tend to think on the bad side of things so I just presumed (wrongly obviously - lol) that I was gonna get some form of deduction from the full NSP.
I can calm down now......finally !

molerat

Your 2016 calculations would have been

New, as above, £155.65 - £24.21 = £131.44

Old  30/30 of £119.30 = £119.30 + £45.79 S2P = £165.09

So old wins.

The first £155.65 of that has increased with the triple lock so is now worth £221.20

The remaining £9.44 (protected amount) has increased with CPI and is now worth £12.45

Those 2 components will increase in the same way each year.

Under the new rules a spouse can inherit half that protected amount.

hotlips46

One thing that is not fair and could start off a big miss selling of defined benefit pension schemes. e.g. those who are/have retired after April 2016. You will have a reduction in your state pension because with a final salary (DB) pension as all local goverment and some private pensions you are contracted out of SERPS and you pay a reduced N. I. Now when you joined your scheme you were never told your state pension would be reduced because you are contracted out. This is so disappointing for all these pensioners who have retired or going to who are in a final salary scheme find out their state pension is been reduced. THIS IS MISS SELLING. Because you should have had the option to paying the full N. I. contribution. This is worth a petition.

molerat

hotlips46 said:

One thing that is not fair and could start off a big miss selling of defined benefit pension schemes. e.g. those who are/have retired after April 2016. You will have a reduction in your state pension because with a final salary (DB) pension as all local goverment and some private pensions you are contracted out of SERPS and you pay a reduced N. I. Now when you joined your scheme you were never told your state pension would be reduced because you are contracted out. This is so disappointing for all these pensioners who have retired or going to who are in a final salary scheme find out their state pension is been reduced. THIS IS MISS SELLING. Because you should have had the option to paying the full N. I. contribution. This is worth a petition.

It is not mis-selling, nothing was sold. Many would have had the option to opt out of the pension and remain contracted in. Those contracted out, especially in PS pensions, will be way better off than if they had stayed contracted in.