Total Pension Pot calculation…

cockerspaniels

Wonderful, thank you for the link.

dunstonh

On my state pension forecast that I requested last month. It states I have the full qualifying years for state pension, even though I was contracted out (Cope)(was not aware of Cope until I received the forecast letters in recent years). So will I then receive a reduced state pension because of this, or it will not impact me? 

On the old state pension, it was made up of different segments.    As a defined benefit pension scheme member, you paid less NI as you contracted out of SERPS/S2P using.  That meant you only qualified for the basic state pension but not SERPS or S2P.    When the old multiple state pensions were abolished and combined to form a single state pension (NSP), a calculation was made to convert your old entitlement into new entitlement under the new state pension.    COPE is the figure from that calculation.   It serves no other purpose.     You get less from the new state pension unless you have sufficient qualification of NSP years.   i.e. if you continued working past 2016 you gain NSP years.   Ultimately, in very simple terms, if you have more years than are needed but some of those were contracted out years, your better years will replace your worst years, but you can never go above the NSP maximum.   (The only way to go above NSP maximum is to have been contracted in and have obtained greater entitlement than the maximum NSP. Effectively the opposite of COPE but then your DB scheme would be lower).

The defined benefit scheme effectively pays you more by being contracted out.   i.e. It was shifted to the DB scheme instead of the state.

As you have mentioned I will take advice when I receive the current private pension forecast. &nbsp;Should I request a&nbsp;<span>CETV then or not when I do this pls?</span>

A CETV is irrelevant unless you intend to transfer the pension to a defined contribution scheme.   Such a transaction is unusual nowadays as CETVs are around half the value they were in 2021 and statistically the transaction is only suitable in around 1 in 10 cases.   

cockerspaniels

Thank you for the clarification on COPE & CETV, extremely grateful for your summary.

Albermarle

Yours looks like £1 of pension given away gets you £17.80, so you need to decide if that is better for you than the bigger pension.

OP - Whether to take the lump sum or increased pension is a common question on the Pensions forum.
One thing to take into account is the terms of the pension.
Will it increase every year in line with inflation? ( Very good if it does)
Or will it rise with inflation but capped at say 3% ( Less good)
Will it pay a Spouse a pension if you die before them ? ( 50% , 66% ?)
Etc
The better the terms of the pension, the less attractive taking the lump sum is.

Although my own DB pension only offered full lump sum or no lump sum, I understand that most will also offer arrangements inbetween.

Brie

moved to the pensions board!!!

Cobbler_tone

There is value that you can call a pot and nothing nasty will happen to you. If my DB scheme it is roughly 4 times the lump sum but there will be variances. It wont be anywhere near as easy as a DC to get your hands on it, if you so wish.

cockerspaniels

Albermarle said:

Yours looks like £1 of pension given away gets you £17.80, so you need to decide if that is better for you than the bigger pension.

OP - Whether to take the lump sum or increased pension is a common question on the Pensions forum.
One thing to take into account is the terms of the pension.
Will it increase every year in line with inflation? ( Very good if it does)
Or will it rise with inflation but capped at say 3% ( Less good)
Will it pay a Spouse a pension if you die before them ? ( 50% , 66% ?)
Etc
The better the terms of the pension, the less attractive taking the lump sum is.

Although my own DB pension only offered full lump sum or no lump sum, I understand that most will also offer arrangements inbetween.

✔️Thank you for your input and especially grateful for the reminder to check the terms of the scheme, will add it to my list.