Paying extra NI for SERPs contracted out years - does it help

pensionhelpplease

Hi

After some help please

I'm 60 and looks like I'll be working to 67
I currently have 33 years of full contributions so will easily get to 35 years
My pension currently will be reduced by a COPE amount of £38.30 from £221.30 (17%) due to being contracted out of SERPS for a few years 
I can currently add a few years of missed NI before 2016 (8 years available), which obviously disappear next year, and 2 years after 2016
If I pay some of these years will this reduce my COPE shortfall, and how many years would I need to pay?

Thanks for any assistance

molerat

35 years is of no relevance to you, that is only for those born this century, you may need more or less depending on your personal circumstances.  It is not as simple as buying years. Pre 2016 years need to be treated with extreme caution, they may each add differing amounts or nothing at all.  You cannot reduce your "COPE shortfall" as such a thing does not exist. Your pension will not be reduced by the COPE amount, COPE doesn't work like that. Answer the below and someone will point you in the right direction.

Current weekly £££.pp amount accrued up to April 2023
Number of pre April 2016 NI years full
Number of post April 2016 NI years full
Tax year you reach state retirement
Years which show not full and prices

pensionhelpplease

Thanks molerat

Answers - the best I can do are:

Current weekly £188.11 amount accrued up to April 2023
Number of pre April 2016 NI years full 27
Number of post April 2016 NI years full 6
Tax year you reach state retirement 2030-2031
Years which show not full and prices 2008-2009, 2009-2010,2010-2011,2011-2012,2012-2013,2013-2014,2014-2015, 2015-2016, 2016-2017, 2017-2018 All £824.20

molerat

There is something wrong with those numbers. What does the top line box state as the max pension - £203.85 or £221.20 - as £188.11 does not work at 2024 rate - is that an old pre 2024 raise forecast ?  You cannot have 6 full post 2016 years showing as you only 5 available from 18-19 to show on a forecast, 23-24 will not have been added yet (which could be the reason £188.11 does not work). The whole thing is pretty straightforward maths so any input errors jump out. Also the forecast will state how many more years you need to contribute to get the full amount (likely 6).

I will wait for your reply before I write more.

pensionhelpplease

Apologies I'd counted 23-24 even though its not been added yet so 5 full years currently 

Max pension £221.20

Another 6 years of contributions needed

Dazed_and_C0nfused

pensionhelpplease said:

Apologies I'd counted 23-24 even though its not been added yet so 5 full years currently 

Max pension £221.20

Another 6 years of contributions needed

Five post 2016 years gets you from £188.11 to £219.71/week, the sixth year just adds the last £1.49.

pensionhelpplease

Thanks
So each year gives me £6.32 a week, therefore if I pay for 2016-2017 & 2017-2018 @ £824.20 does that give me an additional £12.64 to offset against my COPE reduction of £38.3

p00hsticks

pensionhelpplease said:

Thanks
So each year gives me £6.32 a week, therefore if I pay for 2016-2017 & 2017-2018 @ £824.20 does that give me an additional £12.64 to offset against my COPE reduction of £38.3

No - as Molerat has said, your COPE amount is NOT deducted from your forecast pension amount. 
That COPE figure was used once when the new State Pension was introduced in 2016 to help determine your 'starting amount' at that time and can now be ignored 
 
In your initial post you said 
pensionhelpplease said:

I'm 60 and looks like I'll be working to 67

If that is genuinely your intention and you will be earning enough to get NI credits for those future years then there is really no need to be buying past years as well. 

Keep the money, revisit your forecast before you reach state pension age and if for whatever reason you haven't made up those extra years between now and then, then loo kat making voluntary contributions - you will always be able to fill gaps going back six years.  

molerat

As others have said you need another 6 years, including 23-24, to reach the max and you have 7 more years, including 23-24, to get there so there is no need to purchase any more.

If you were to purchase some you must not buy more than 3 pre 2016 years, which would add £5.65 each. Post 2016 years would add £6.32 each.

At the introduction of the new pension in April 2016 with 27 years contributions you were given a starting amount of the higher of the old or new calculations.  You had a new amount of £120.07 - £38.30 COPE = £81.77 and an old amount of £107.37 + £2.76 S2P = £110.13.  The old amount, which was the higher of the 2 calculations, already had a contracted out deduction included in the S2P. That left you needing (£155.65 - £110.13) = £45.52 / £4.45 = 10.2 (so 11 full) more years to reach the max, a total of 38 years.

pensionhelpplease

Thanks everybody for your help on this I'd just like to simplify the above for my understanding and summarise
Please comment if I've got it right (or wrong!)

The maximum pension I can get from the state will be £183.00 (ignoring any future rises) and £38.3 from whichever pension scheme my COPE went to
I can't increase this amount by paying for pre or post 2016 years
To get this I need another 6 years contributions (out of 7 years potential work)
If I don't work all of these years I will need to purchase enough years to give 6 years contributions
This will give me 38 years of contributions (not 35 which is all I thought I needed)

Hopefully this is correct?

Thanks in advance

Dazed_and_C0nfused

The maximum pension I can get from the state will be £183.00 (ignoring any future rises) and £38.3 from whichever pension scheme my COPE went to

No idea how you have arrived at that conclusion.

Everything you have previously posted indicates you can get State Pension of £221.20/week (by buying some additional years).

And just forget the £38.30.  If it is a defined benefit scheme you will get whatever the scheme rules say.  Highly likely to be far more than £38.30.