Hi Anne and welcome to KnittingHelp!
These kind of pockets are made by replacing a group of stitches with the pocket lining stitches and proceeding with the pattern. You should have knit the stitches for the pocket lining already (if not, do that part now) and placed them on a stitch holder.
The cast off row is a little clearer this way: "Next row knit 8. Cast off 20 stitches AT SAME TIME dec 5 sts across cable. Knit to end (21 sts)"
You should decrease the 5 sts as you cast off the 20 sts for the front of the pocket. When you finish the row you'll have 8sts on the needle, a gap at the bound off sts and then 13sts (21sts total). Turn and purl the 13sts, then work the appropriate cable pattern row on the pocket lining sts that are sitting on a stitch holder. You can work them right off the stitch holder using that as your left needle if you like. Then purl the 8sts. Now you can continue with the pattern as you have been doing but with an opening where the pocket will be. Later you'll put an edging on the front of the pocket and sew the pocket lining to the sweater.