Contracting out implications

vivvov · 24 April 2018 at 8:08PM

Hello All

I've started to work out what's going on with "pensions" and I'm a novice so need advice.
I've checked up on the state of my state pension.. 10 years worth of contributions to go but 15 years of working life left to attain the 35 years worth presently needed.

But then I read about opting out on the main site...I'm pretty sure I opted out for about 8 years between 2000 and 2008..when I signed up for a housing association pension and the company advisor said sign this bit as well...

The main Martin site seemed to indicate that if I went to the GOV site, it would say what/how many years I was "COPE"..contracted out pension equivalent...but the GOV site didn't give me any info on the issue....it just gave me the years that I've contributed enough (24)..the years I didn;t back in the day(!!!!less youth years) and the years I might pay in to top up..(!!!!less adult years)...4 recent years.

I'd like to end up with the full quota...

Am I looking in the wrong place..re COPE.. and the potential short in state pension?..could someone steer me down the right path please.
..or is it "complicated".as people like to say.

Thanks in advance

Thank you in advance.

dunstonh · 24 April 2018 at 9:12PM

I'm pretty sure I opted out for about 8 years between 2000 and 2008

opt out means you opted out of joining a workplace pension. Contracting out is what you mean.

but the GOV site didn't give me any info on the issue.

The paper version gives you the COPE figure. However, you dont need that figure. What you qualify for is important . is yours saying £164.35 is the forecast or is it lower?

molerat · 24 April 2018 at 9:23PM

All you need to know is contained in the on line statement. Your COPE amount will be linked from the front page under a heading "You've been in a contracted-out pension scheme".

What is your current amount ?
How many years have you currently got ?
How many years to SPA ?
Any gaps after 2006 ?

The COPE figure is of no real relevance though, it was only used to calculate your 2016 starting amount. The statement will tell you what you can receive going forward, what you have got so far and the maximum you can receive if you fill any earlier gaps. The first and third may be the same.

Paul_Herring · 24 April 2018 at 11:18PM

vivvov wrote: »

but the GOV site didn't give me any info on the issue

At the bottom of this page:

you should probably have this:

and the link should take you to something lile:

But as noted, the COPE is largely irrelevant now, since it only applied when the pension was calculated back in 2016. At best it may be a guideline as to how much extra you may get from your private pension scheme that accepted the NI rebates.

dunstonh · 25 April 2018 at 12:03AM

Nicely presented PH.

For reference, if you have never been contracted out, the "You;ve been in a contracted-out pension scheme" section does not appear. The page ends with the "Proposed change to your State pension age" section.

jubilee14 · 25 April 2018 at 2:58PM

This is really useful as i too hadnt realised there was a link to COPE value of deduction. Does it mean if you do what ever you should have worked to get full state pension that you cant get more as its already ringfenced in the Private pension you have?

Paul_Herring · 25 April 2018 at 3:25PM

jubilee14 wrote: »

This is really useful as i too hadnt realised there was a link to COPE value of deduction. Does it mean if you do what ever you should have worked to get full state pension that you cant get more as its already ringfenced in the Private pension you have?

COPE isn't a ringfenced amount in a private pension.

COPE represents the additional state pension you would have got (as calculated at that point in time in 2016 when it was done,) had you not contracted out, but no longer have.

As such, it's (very) loose proxy for what those NI rebates could get you in a private pension, but you shouldn't read too much into it.

Ignoring that, it is possible to get the full state pension (even if you have contracted out years) by earning enough further full years.

For example if you've worked 35 years, and contracted out for 10 of them, so you only have '25 contracted in years', if you work a further 10 years, you'll be back up to the full state pension.

jubilee14 · 25 April 2018 at 4:28PM

Thanks thats what i originally thought with 10 years to pay and possible 20 years working payment thats good to know.
( Sorry for the hijack)

vivvov · 27 April 2018 at 1:18PM

Thanks for all the posts
Only just logged back on and I haven't got the full info to hand but the GOV site indicated I had:
24 years contributions..roughly £124 of the full £164.
15 years to go prior to pension age...so just 11 years more of contributions to hit the full 35 years contributions.
4 years where I could contribute since 2009..and up until 2023 to decide if I'd like to pay them...3 of the four years aren't full amount payments so probably worth paying just for peace of mind.

I'll have to look into whether I was contracted out at a Housing Association I worked at 2000-2009...I get statements and the predicted value is in the tens of thousands..a good amount. But if the figure I need to concentrate on is the 24/35 with 15 to go...then everything else is proverbial gravy!

Now I've actually started to look at the stuff I've been stuffing into a drawer for years I'm thinking..being as I'm debt free, mortgage free, no kids and now have more money than the small amount of sense I claim to have..it's probably time to get pension advise and set up a SIPP in order to maximise tax efficient savings.... especially if I get the job I've applied for on Wednesday next....

No doubt this is the start of a number of naive posts on the matter in hand and I thank you in advance for your posts.

Contracting out implications

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