State pension forecast and COPE

paulus6 · 10 April 2018 at 11:20AM

Asghar wrote: »

No, no, no.

What is so hard to understand, have you read the posts in this thread and your 2 years old article link properly.
The COPE figure has already been deducted from your State Pension forcast.

I have read the article, and yes, I agree it is very confusing,out of date, and also by the Telegraph !! But in the 6th paragraph it states.........

"Savers who "contracted out" of their state pension entitlement at any point, will have an amount deducted from their new, flat-rate pension, the maximum level of which is £155.65."

The amount of pension has changed slightly but the implication is that there is a certain amount of money that is deducted from the new flat rate to reflect the amount the person contracting out has built up.

dunstonh · 10 April 2018 at 11:28AM

paulus6 wrote: »

I have read the article, and yes, I agree it is very confusing,out of date, and also by the Telegraph !! But in the 6th paragraph it states.........

"Savers who "contracted out" of their state pension entitlement at any point, will have an amount deducted from their new, flat-rate pension, the maximum level of which is £155.65."

The amount of pension has changed slightly but the implication is that there is a certain amount of money that is deducted from the new flat rate to reflect the amount the person contracting out has built up.

If you have contracted out, you will get a deduction from the £155.65 to reflect the contracted out years. However, this will be in conjunction with the contracted in years that you had previously and any you may get in future. You cant just look at the contracted out years in isolation. e.g you could have 5 years contracted out and 35 years in

It is quite possible to have higher than £155.65 (as it was then) and still have been contracted out.

GunJack · 10 April 2018 at 11:35AM

paulus6 wrote: »

I have read the article, and yes, I agree it is very confusing,out of date, and also by the Telegraph !! But in the 6th paragraph it states.........

"Savers who "contracted out" of their state pension entitlement at any point, will have an amount deducted from their new, flat-rate pension, the maximum level of which is £155.65."

The amount of pension has changed slightly but the implication is that there is a certain amount of money that is deducted from the new flat rate to reflect the amount the person contracting out has built up.

...and that is (one of thee many) bits that is incorrect, wrong, inaccurate, b0ll0c£$

The implication in the article was put there by someone who didn't understand how it worked, and caused lots of people (like you, no offence intended) to also understand incorrectly.

COPE was calculated once, and used in the calculation of your starting amount at Apr 2016, that's it, not used again, not taken off your newSP, and will not be identified by your personal pension provider...

paulus6 · 10 April 2018 at 11:44AM

So, lets clarify ....if , according to the many replies to my question (did you notice the question mark at the end of my reply ? I am asking for advice, not abuse by the way !! ), you not only receive the flat rate stated in your pension forecast ,which in my case is £159, but you also receive the benefits you have built up by contracting out, which in my case is approx £50,000 in a private pension and 5 years of contributions in a final salary pension ? Agreed ?
So, what benefits does a person who remained contracted in receive, compared to me ? If £159 is now the maximum we can all receive in the form of a state pension (because the second state pension has been scrapped ), then , if I was one of the contracted in millions, I would be pretty !!!!ed off, to say the least.
Before anyone replies, this is a question, not a statement of fact !

molerat · 10 April 2018 at 12:10PM

If you were not contracted out you received the benefit of S2P which comes from the extra NI paid. Of course the new 35 year £155.65 pension is only 100% applicable to those starting out their working life after April 2016 where contracting out has been abolished. Those starting out before then are subject to a transitional arrangement where they receive the higher of the new or old system calculations so no one loses out. At that calculation date I was given the higher old method figure as my contracted out deduction would have brought the new pension down to around £80 so I lost nothing and have the benefit of increasing that figure going forward. MrsM on the other hand was given the new method figure as she was never contracted out and had little S2P, gaining around £13. £155.65 is not the maximum you can receive, only the maximum attainable under the new system. If you had more than that at April 16 you keep it but you cannot add to it and the part above the £155.65 is revalued at a different inflation figure each year. Note I use £155.65 as that is the figure at April 16 when the calculation was done and any revaluation must be backdated to then.

GunJack · 10 April 2018 at 12:12PM

paulus6 wrote: »

So, lets clarify ....if , according to the many replies to my question (did you notice the question mark at the end of my reply ? I am asking for advice, not abuse by the way !! )any abuse in my reply was aimed at the article writer and their editor, not you , you not only receive the flat rate stated in your pension forecast ,which in my case is £159, but you also receive the benefits you have built up by contracting out, which in my case is approx £50,000 in a private pension and 5 years of contributions in a final salary pension ? Agreed ? Yes, that's correct.
So, what benefits does a person who remained contracted in receive, compared to me ? If £159 is now the maximum we can all receive in the form of a state pension (because the second state pension has been scrapped ), then , if I was one of the contracted in millions, I would be pretty !!!!ed off, to say the least.
Before anyone replies, this is a question, not a statement of fact !

In the case of your last paragraph, if you had built up SERPS up to Apr 2016, that took you above the new flat rate, you would have kept that as your starting amount, but unable to increase that amount other than the inflation increases (or deferral).

dunstonh · 10 April 2018 at 12:16PM

you not only receive the flat rate stated in your pension forecast ,which in my case is £159, but you also receive the benefits you have built up by contracting out, which in my case is approx £50,000 in a private pension and 5 years of contributions in a final salary pension ? Agreed ?

yes

So, what benefits does a person who remained contracted in receive, compared to me ? If £159 is now the maximum we can all receive in the form of a state pension (because the second state pension has been scrapped ),

They get the same as you except no personal pension of £50k (final salary was not a choice so not applicable). - caveat, they may have built up an entitlement that takes them over the £155. So, they could have more.

, if I was one of the contracted in millions, I would be pretty !!!!ed off, to say the least.

Contracting out had a risk. It may or may not have resulted in a better outcome. Those that took that risk have now benefitted from it. Those that didnt take the risk have got exactly what they expected. So, they shouldnt be p'd off.

Your risk decision to contract out made you £50k better off.

Silvertabby · 10 April 2018 at 12:22PM

So, lets clarify ....if , according to the many replies to my question (did you notice the question mark at the end of my reply ? I am asking for advice, not abuse by the way !! ), you not only receive the flat rate stated in your pension forecast ,which in my case is £159, but you also receive the benefits you have built up by contracting out, which in my case is approx £50,000 in a private pension and 5 years of contributions in a final salary pension ? Agreed ?

Yes.

So, what benefits does a person who remained contracted in receive, compared to me ? If £159 is now the maximum we can all receive in the form of a state pension (because the second state pension has been scrapped ), then , if I was one of the contracted in millions, I would be pretty !!!!ed off, to say the least.
Before anyone replies, this is a question, not a statement of fact !

The (old rules) maximum State pension is something like £280 per week, ie £120 basic pension plus SERPS/SP2. Due to the provisional protections, someone who had already accrued more than the new single tier pension of £155 as at April 2016 will still receive that higher amount. However, and this is the crunch, even if that person is some years off State pension age and is carrying on working their State pension will be 'frozen' (apart from cost of living increases). So, yes, there will be many people out there who may have been expecting over £200 per week who will only get their 2016 foundation amount.

Contracting out ended in 2016, so everyone - paying into a private/occupational pension scheme or not - will eventually get £159 per week State pension in return for 35 years of full, non-contracted out, NI contributions.

GunJack · 10 April 2018 at 12:27PM

BUT, to go along with the state pension, everyone working past Apr 2016, in theory, should have either:-

1. a company pension
2. an auto-enrollment/workplace pension, or
3. a private (personal) pension like a SIPP, stakeholder, etc.

to go along with their state pension.

paulus6 · 10 April 2018 at 12:56PM

Thanks for the reply..............I think we "got there" ...in the end:)

State pension forecast and COPE

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free