Can I Cash In My COPE Pension?

Wondering if you can cash in your COPE pension? We explain what COPE is, how it affects your retirement and whether you can withdraw or transfer it.

Pensions are confusing enough without adding mysterious acronyms into the mix. If you’ve ever checked your State Pension forecast and noticed something called COPE.

Fear not. We’re here to break it all down so you can understand exactly what COPE means for your retirement and whether you can access that money early.

What Is COPE?

COPE stands for Contracted-Out Pension Equivalent. It’s not an extra pension, nor is it some hidden pot of money waiting to be unlocked. Instead, COPE is a theoretical figure that estimates how much extra pension you built up in a private or workplace scheme while being contracted out of the Additional State Pension (SERPS or S2P) before 2016.

Wait… Contracted Out? What Does That Mean?

From the 1970s until April 2016, many workplace pensions allowed employees to contract out of the Additional State Pension. This meant:

  • You and your employer paid lower National Insurance (NI) contributions.

  • Instead of getting the Additional State Pension, your workplace or private pension made up the difference.

The government introduced COPE to show you how much you could expect to get from your private/workplace pension instead of the Additional State Pension.

Can You Cash In Your COPE Pension?

The short answer: No, because COPE isn’t a separate pension you can cash in.

However, since COPE represents money built up in a private or workplace pension, you might be able to access your pension pot, depending on the type of scheme you were in.

If Your COPE Relates to a Defined Contribution Pension (DC):

  • Yes, you can access it from age 55 (rising to 57 in 2028).

  • You can withdraw it as a lump sum, take flexible income, or buy an annuity.

  • 25% is tax-free; the rest is taxed as income.

If Your COPE Relates to a Defined Benefit Pension (DB):

  • You can’t cash it in like a savings account, but you will receive a regular retirement income for life.

  • Some DB pensions allow early access, but this usually means a reduced payout.

  • Transferring a DB pension into a DC scheme is possible, but it comes with risks and requires financial advice if over £30,000.

Does COPE Affect My State Pension?

This is where people get confused. COPE does not reduce your State Pension—it just explains why yours might be lower than the full amount.

  • If you were contracted out, you paid lower NI, so you didn’t build up as much Additional State Pension.

  • This means your State Pension forecast might be lower than the maximum (£203.85 per week as of 2024).

  • However, your private/workplace pension (where COPE was built up) is supposed to make up the difference.

Can You Boost Your State Pension If You Were Contracted Out?

Yes! If your State Pension forecast is lower than expected, you can:

  1. Pay voluntary National Insurance contributions to fill any gaps.

  2. Work longer and contribute more to increase your State Pension.

  3. Check your workplace pension to see what you’re due from COPE.

Key Takeaways: Can You Cash In COPE?

  • COPE is not a separate pension fund – it’s just an estimate of pension benefits built up while contracted out.

  • You can’t cash in COPE itself, but you may be able to access the pension linked to it, depending on the scheme.

  • Your State Pension isn’t directly reduced by COPE, but it might be lower if you were contracted out.

  • Check your workplace or private pension provider to see how COPE translates into your retirement income.

If you see COPE on your pension statement, don’t assume the government is holding back money from you. It simply means that instead of building up extra State Pension, you were paying less NI and saving into a workplace/private pension instead.