Pension entitlement, COPE, NI contributions confusion

[PreFabBroadBean]

I rang the HMRC 3 years ago, and was told I contracted out of SERPS from 1995 to 2012, although most of that time, it was in name only, as I wasn’t earning enough. (In fact, I was paying NI contributions and tax, but at the self employment rate.)
My contracted out contributions went to my pension provider in five years, 1995/6 to 1997/8, and 2000/1 to 2001/2, and this was paid into my private pension.

From the GOV website
COPE estimate £10.53 a week (2016 estimate).
Pension summary - I can get my State Pension in 2030. My forecast is £221.20 ie the full amount.
NI contributions - So far, I have 39 years showing "Full year" contributions. However, those "Full year" contributions include 1995/6 to 1997/8, and 2000/1 to 2001/2, when I was contracted out. Is that right? Do they still count as full year contributions?

I'm basing my financial planning on the Gov website saying I get the full new State Pension, but is that right?
Thank you for any help. I'm so confused.

The forecast is correct, but make sure you're reading it correctly. The big box at the top is what a lot of people read as their forecast - it's actually the green bars or text under the box that count.

It will either give a smaller number than the one in the box and say you need to contribute an extra X years, or it will say you have full contributions and can't increase your pension any more.

This is the green box. But I don't understand why the website says (on a separate page) I have full NI contributions for the 5 years that I contracted out. I'm just so confused. They seem to have hidden the COPE figure as well.

Yes, you have full pension then.

The full years bit is because they are full for the basic pension under the rules at the time. They may count as less than a full year towards your 'total of 35' calculation, but they aren't a gap you could fill in if you were short.

The COPE amount being hidden is good - it only confuses people. I've seen so many questions about 'is this added or subtracted?'¹. They shouldn't really put it there at all because it's only a guess. It would be much better to simply direct people to their private/employer pension statement.

¹ The answer is 'neither'.

Thank you. Yes, the COPE is confusing, especially as the amount quoted seems to be as of 2016.

I was confused by an article by Paul Lewis in the i today, where someone who contracted out didn't get the full new state pension. I'm still confused by that, as my contracted out years seem to still count for the new state pension, but his didn't, and he only got £177 despite working for many years.

If cope is a factor it will be written below the headline number. My cope rate is £6.95 so my pension will be paid - £6.95 if I pay in another 5 years. If I pay in 9 years (possible based on my age) the cope will disappear completely I've been told

If cope is a factor it will be written below the headline number.
I don't think it appears below the headline number any more.

As I thought I understood it:
When we contracted out, we diverted some NI contributions from the government pension to our private pension. The amount we diverted has hopefully risen in value, and COPE is the government's estimate of how much those diverted contributions should be worth to us per week - as of 2016. However, in reality, this totally depends on how your private pension performed.

So doesn't that mean that your COPE value will still be there, just that you don't have enough contributions yet (35 years) for the full new state pension? Or am I totally confused? 😀

See? Confusing.

That's not how it works. The COPE amount is not deducted. It's separate from the amount you are short of the full new state pension, and it will never disappear (in fact if they keep calculations up to date, it will grow).

Anyone who started paying NI after the change to the new state pension in 2016 needs 35 years of contributions to get the full pension.

Anyone who started paying NI before 2016 had a calculation done when the change happened. This worked out what they had paid under the old system would have been worth if it had been paid entirely under the new system. Not sure exactly how the formula works - some combination of actual amounts and numbers of years, with additions or deductions for being in or out of SERPS - but the details aren't really important. What matters is the result, which gave you a number of new-system years as your 2016 starting point. From that point you then need to add enough years to make it up to 35 new-system years. Which may mean paying more or less than 35 actual years in total. [Edit: this sh is the amount below the headline figure. This shortfall in ount/years isn’t the COPE amount - it's on everybody's statement whether they were contracted out or not.]

The COPE amount shown on the statement is an estimate of the private sector pension you will get, on the assumptions that only your contracted out SERPS payments went into it and that your particular pension fund has had consistent average performance. This is quite unlikely - and entirely irrelevant for people who were contracted out because of being in a public sector pension, which is calculated by totally different methods.