Checking COPE

System

This discussion was created from comments split from: Good (and short!) explanation of COPE.

LouieRTW

benferry said:

But how do I check the COPE?

My COPE (from a statement I printed out in August 2019) is £35.87.  I had 37 qualifying years at 6 April 2016.  I think means my foundation amount is £155.65 - £35.87 = £119.78.  Which meant I then needed a further (only)  just over 8 years for a full new pension (£35.87 / {155.65 / 35}) (am I using the right year's figures?).

I've not worked since 2015/16.  Prior to 5 April 2025, my online statement said I would be entitled to £175 per week without further contributions.  I think that means that 7 years contributions would have got me to £219.24, with the year 8 contribution increasing my pension by a further £1.96 pw.  Not sure why the difference but I definitely need 7 years, with year 8 being a maybe!

My question though, is that everything I have read assumes that the figure provided by GOV.UK is correct.  Unlike @benferry, it does make a difference to how much I still need to contribute.  

How is COPE calculated and how can I check it is correct?

molerat

LouieMSE said:

benferry said:

But how do I check the COPE?

My COPE (from a statement I printed out in August 2019) is £35.87.  I had 37 qualifying years at 6 April 2016.  I think means my foundation amount is £155.65 - £35.87 = £119.78.  Which meant I then needed a further (only)  just over 8 years for a full new pension (£35.87 / {155.65 / 35}) (am I using the right year's figures?).

I've not worked since 2015/16.  Prior to 5 April 2025, my online statement said I would be entitled to £175 per week without further contributions.  I think that means that 7 years contributions would have got me to £219.24, with the year 8 contribution increasing my pension by a further £1.96 pw.  Not sure why the difference but I definitely need 7 years, with year 8 being a maybe!

My question though, is that everything I have read assumes that the figure provided by GOV.UK is correct.  Unlike @benferry, it does make a difference to how much I still need to contribute.  

How is COPE calculated and how can I check it is correct?

Your foundation amount was the higher of the old or new.  With £175 at April 2024 your 2016 amount was £123.14 so based on old rules of £119.30 basic + £3.84 additional pension needing (7.3) 8 full years to reach the max.

LouieRTW

Marcon said:

Call the Contracted Out Pensions Helpline on 0300 200 3500 and ask for a Contracted Out history.                                                                                                                                                                                                 

Will do.  Thanks for the tip.

LouieRTW

molerat said:

LouieMSE said:

My COPE (from a statement I printed out in August 2019) is £35.87.  I had 37 qualifying years at 6 April 2016.  I think means my foundation amount is £155.65 - £35.87 = £119.78.  Which meant I then needed a further (only)  just over 8 years for a full new pension (£35.87 / {155.65 / 35}) (am I using the right year's figures?).

I've not worked since 2015/16.  Prior to 5 April 2025, my online statement said I would be entitled to £175 per week without further contributions.  I think that means that 7 years contributions would have got me to £219.24, with the year 8 contribution increasing my pension by a further £1.96 pw.  Not sure why the difference but I definitely need 7 years, with year 8 being a maybe!

My question though, is that everything I have read assumes that the figure provided by GOV.UK is correct.  Unlike @benferry, it does make a difference to how much I still need to contribute.  

How is COPE calculated and how can I check it is correct?

Your foundation amount was the higher of the old or new.  With £175 at April 2024 your 2016 amount was £123.14 so based on old rules of £119.30 basic + £3.84 additional pension needing (7.3) 8 full years to reach the max.

So what is the "deduction for contracting out" under the old rules?  I had assumed (wrongly it seems!) this was the same as COPE, but obviously not if it's not taken into account in arriving at the 'old rules' foundation amount.

Additional pension - looking at old statements, I have one dated 7 July 2009 which advises "additional state pension" of £5.60.  Then one dated 6 February 2013 which says "we estimate that your additional State Pension and Graduated Retirement Benefit, based on your National Insurance contributions record to date, is £0.59 a week".  And the same wording on 4 July 2013 concluded £0.23 a week.  None of which is £3.84, although clearly not a million miles away.  Why would the additional State Pension figures have fallen over time?

SnowMan

LouieMSE said:

So what is the "deduction for contracting out" under the old rules?  I had assumed (wrongly it seems!) this was the same as COPE, but obviously not if it's not taken into account in arriving at the 'old rules' foundation amount.

Additional pension - looking at old statements, I have one dated 7 July 2009 which advises "additional state pension" of £5.60.  Then one dated 6 February 2013 which says "we estimate that your additional State Pension and Graduated Retirement Benefit, based on your National Insurance contributions record to date, is £0.59 a week".  And the same wording on 4 July 2013 concluded £0.23 a week.  None of which is £3.84, although clearly not a million miles away.  Why would the additional State Pension figures have fallen over time?

Contracting-out was a feature of the old state pension. So it's allowed for in the old rules calculations through the actual state pension you have earned up to April 2016. Had you always been contracted-in up to April 2016 then your additional state pension would have been higher than £3.84pw, but because you have been contracted-out it is only £3.84pw

There is no contracting-out option under the new state pension, everyone is contracted-in. Hence to do a like for  like for like comparison of what you would have earned up to 5th April 2016 had the new state pension been in existence up to then you have to notionally deduct the value of the alternative pension received through contracting-out and that is the COPE.

So the contracted-out deduction is only needed under the new rules calculation as it's already allowed for in the old rules calculation through the additional state pension amount.

As always molerat is correct in his calculation, based on your state pension earned at 2024/2025 being exactly £175.00pw at 2024/2025. He's worked back from the £175.00pw amount as follows

The adjustment for contracting-out is explained here. 

The calculation of additional state pension (ASP) was fiendishly complicated but it's not surprising to anyone who understands the complications that your ASP could reduce over time, it happened a lot. The reason your additional state pension (ASP) decreased over time is likely due to accrual for the period up to 1996/1997. Up to then you didn't strictly speaking contract out of SERPS you instead contracted out of Guaranteed Minimum Pension (GMP). And while SERPS and GMP could be the same they weren't necessarily the same and even if they were the same in the year they accrued, they often subsequently increased at different increase rates and so diverged from each other in amount. 

Actual ASP (taking into account contracting-out) was calculated as notional ASP (on assumption not contracted-out) less GMP. The ASP (on assumption not contracted-out) subsequently increased broadly in line with national earnings but this could be lower than the rate of increase of the GMP (which could for example be 8.5%pa, 7.5%pa or 7%pa). And hence actual ASP earned up to 1996/1997 could reduce over time because national average earnings was typically less than 8.5% etc. 

You may have then earned some ASP post 1996/1997 which subsequently caused your overall  actual ASP to increase again up to around £4pw.   

LHW99

SnowMan said:

LouieMSE said:

So what is the "deduction for contracting out" under the old rules?  I had assumed (wrongly it seems!) this was the same as COPE, but obviously not if it's not taken into account in arriving at the 'old rules' foundation amount.

Additional pension - looking at old statements, I have one dated 7 July 2009 which advises "additional state pension" of £5.60.  Then one dated 6 February 2013 which says "we estimate that your additional State Pension and Graduated Retirement Benefit, based on your National Insurance contributions record to date, is £0.59 a week".  And the same wording on 4 July 2013 concluded £0.23 a week.  None of which is £3.84, although clearly not a million miles away.  Why would the additional State Pension figures have fallen over time?

Contracting-out was a feature of the old state pension. So it's allowed for in the old rules calculations through the actual state pension you have earned up to April 2016. Had you always been contracted-in up to April 2016 then your additional state pension would have been higher than £3.84pw, but because you have been contracted-out it is only £3.84pw

There is no contracting-out option under the new state pension, everyone is contracted-in. Hence to do a like for  like for like comparison of what you would have earned up to 5th April 2016 had the new state pension been in existence up to then you have to notionally deduct the value of the alternative pension received through contracting-out and that is the COPE.

So the contracted-out deduction is only needed under the new rules calculation as it's already allowed for in the old rules calculation through the additional state pension amount.

As always molerat is correct in his calculation, based on your state pension earned at 2024/2025 being exactly £175.00pw at 2024/2025. He's worked back from the £175.00pw amount as follows

The adjustment for contracting-out is explained here. 

The calculation of additional state pension (ASP) was fiendishly complicated but it's not surprising to anyone who understands the complications that your ASP could reduce over time, it happened a lot. The reason your additional state pension (ASP) decreased over time is likely due to accrual for the period up to 1996/1997. Up to then you didn't strictly speaking contract out of SERPS you instead contracted out of Guaranteed Minimum Pension (GMP). And while SERPS and GMP could be the same they weren't necessarily the same and even if they were the same in the year they accrued, they often subsequently increased at different increase rates and so diverged from each other in amount. 

Actual ASP (taking into account contracting-out) was calculated as notional ASP (on assumption not contracted-out) less GMP. The ASP (on assumption not contracted-out) subsequently increased broadly in line with national earnings but this could be lower than the rate of increase of the GMP (which could for example be 8.5%pa, 7.5%pa or 7%pa). And hence actual ASP earned up to 1996/1997 could reduce over time because national average earnings was typically less than 8.5% etc. 

You may have then earned some ASP post 1996/1997 which subsequently caused your overall  actual ASP to increase again up to around £4pw.   

".......It is essential to keep these distinctions clearly in mind (and verce visa)" (1066 & all That, Sellar & Yeatman)