State pension calculation and HMRC calculator

LHW99

singhini said:

@SnowMan That's impressive 
The above calculations show zero figure for COPE   ------>  does that mean the person was always opted in? (i.e. never opted out). 

The reason i ask about the COPE is i don't think i have a cope figure (just like your example) but my friend does yet both our state pension maximum figures are the same i.e. £230.25

She got the following figures from her Gov Gateway:-  (could you do a calculation please)

9 years 
22 years
NI Record = £224.37 
COPE = £22.70 

£230.25 is the NSP maximum. You can't now get more, unless you had already got above the 2016 figure (your "starting amount" = £155.65) due to S2P + Additional SP. That's called a protected payment and doesn't increase with the triple lock, but with CPI

SnowMan

singhini said:

@SnowMan That's impressive 
The above calculations show zero figure for COPE   ------>  does that mean the person was always opted in? (i.e. never opted out). 

The reason i ask about the COPE is i don't think i have a cope figure (just like your example) but my friend does yet both our state pension maximum figures are the same i.e. £230.25

She got the following figures from her Gov Gateway:-  (could you do a calculation please)

9 years 
22 years
NI Record = £224.37 
COPE = £22.70 


EDIT - Ignore below this line

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NOTE TO MYSELF:

If she opted out and got COPE and i stayed opted in, why do i not get more than £230.25 (i think im opted in as i cant find a COPE figure)

When calculating your new State Pension amount, the government compares what you would have received under the old rules (basic plus additional pension) with what you would receive under the new rules. If your "starting amount" under the old rules was higher than the full new State Pension amount, you receive a "protected payment" which is paid on top of the £230.25 rate. This is the only way to get more than the full new State Pension amount. --------> my starting amount under the old rules must have been lower than the NEW full state pension in tax year 2015/2016 when the change happened. 

However in the example above the person also has zero COPE and it shows OLD rules are higher than NEW state pension amount so will this person get more than £230.25 when they come to retire?

Your friend's calculation is as follows (the earlier example was as you say someone who was always contracted-in which was why COPE was zero in that case)

singhini

@SnowMan
I just wanted to say how grateful we are for your help in producing this. Thankyou so much for going out of your way, we appreciate the time and effort you gave. 👍

SnowMan

singhini said:

@SnowMan
I just wanted to say how grateful we are for your help in producing this. Thankyou so much for going out of your way, we appreciate the time and effort you gave. 👍

Worth noting that your friend will reach the full new state pension of £230.25pw (in 2025/2026 values) if she gets a further future qualifying year say for 2025/2026, so 32 qualifying years in total (22 + 9 + 1).

The reason she only needs 32 years rather than 35 years is that her starting amount of £111.65pw above at 6th April 2016, calculated on the old state scheme basis, is more than the £97.84pw new state pension she would have earned by 6th April 2016 had the new state pension always been in place and had contracting-out never existed. 

This excess of £13.81pw (= 111.65 - 97.84) is equivalent to just over 3 years of accrual under the new state pension as a single year of accrual of new state pension in 2016/2017 terms is £4.45pw (=155.65/35).  

Consequently this 3 years reduces the 35 years she needs in total down to 32. 

SnowMan

molerat said:

People think there is some sort of black magic in calculating the state pension top ups and working out the viability of pre 2016 contributions but it is in fact pretty straightforward maths using the 4 points at the top of SnowMan's table.  I similarly drew up a spreadsheet which does the same thing but not as pretty as SnowMan's.

I thought you must have your own spreadsheet for this!

The number of people you've helped on this forum to understand whether and which class 3 voluntary contributions to pay is huge. And the accuracy and clarity of your responses has been phenomenal.