Pension Benefits Information Statement?

[Ninthace]

My Pension in France was not frozen and was paid in Euros by HMG via an Irish bank. That was pre the B word.

[ForcesPensionSociety]

Originally Posted by Party Animal

What reworked figures? Last years pension with a 6.7% rise to this years pension is it, apart from the short April month as alluded to above. I do agree though that potentially waiting to the last day of May before seeing confirmation in writing is odd (and quite frankly unacceptable).

On a separate note and thinking about EngO’s comments- if I choose to retire abroad over the next few years, does my military pension continue to be increased by CPI/inflation every year or is it frozen?

It rises by the inflation measure irrespective of where you live. It is the State Pension that does not necessarily rise - details of which countries do see a rise and which don't are on the gov.uk website.

[BEagle]

Originally Posted by Ninthace

I got the notification of my next year's pension today, The letter said it had gone up by 6.7%. I subtracted what I actually got in my bank account last year from this year's amount, divided it by last year's sum and multiplied by a hundred. The answer I got was nowhere 6.7. The difference in percentage due to the unchanging tax thresholds resulting in a bigger tax take. Am I right to feel conned?

On your 'Advice of Payment' from Equiniti, you will see something like:
'GMP amount increased from 06/04/2004 - new rate of pension £nn,nnn.nn a year'
'Pension of £nn,nnn a year less GMP of £xxxx.xx increased by 6.7%'
'New Rate £mm,mmm.mm from 08/04/2004'

It is only (£nnnnn.nn - £xxxx.xx) = £yyyyy.yy which is increased by 6.7%! To check, multiply £yyyyy.yy by 1.067, then add the GMP of £xxxx.xx to that figure and divide by 12. That should then be the same as the Gross amount shown under 'Future Payments'.

GMP is 'Guaranteed Minimum Pension'.

In my case, although the pension was increased by 6.7%, my 2024 actual 'Gross amount' is 5.9% higher than my 2023 actual 'Gross Amount'.

Cleaar as mud now?

[Ninthace]

Yes, something like that - ish. What matters to me is % change in the money going into the bank every month. That did not go up by 6.7%

[Biggus]

All pay rises in UK are quoted in gross figures/percentages - be it doctors, teachers, serving military or military pension increases. How could it be otherwise, as the "net" increase will vary from person to person depending on their financial circumstances. How would you like increase to be announced... Smith got 5.6%, Jones 5.2%...etc?

Assuming your pension already exceeds the personal tax allowance, ALL of any increase will be taxed, whereas a portion of your existing pension WASN'T - let alone if your lucky enough to be above the higher rate threshold so ant increase is taxed at 40%. Thetefore any percentage increase in your gross salary will not result in an equivalent percentage net increase.

All pretty much from tax affairs 101.

[BEagle]

Indeed! Due to my income tax deduction having gone up by 22%, so that it is now 23.7% of my monthly payments, rather than the 20.5% hitherto, my actual net service pension increase for 2024 is only 1.7%.....

[Ninthace]

Biggus, I appreciate that, but the effect could be have been reduced. for all pension recipients, if the tax thresholds had also been adjusted to take account of inflation in the same way the pensions were. If (big if), my fag packet calculation is correct, my actual take home increase was nearer 2% than 6.7%.

[GreenXCode]

90% of statistics are made up

[Biggus]

For BEagle a 6.7% gross rise in pension becomes 1.7% net, while for Ninthace 6.7% gross becomes 2.0% net - both of which seem very low and no doubt could lead to a sense of disappointment.

I don't know (or want to know) the tax situation of either gentleman, but I assume higher rate tax must come into play in their cases.

As a mere peasant, my entire earnings are all still below the higher rate tax threshold, and for me a 6.7% gross increase in my military pension becomes about 6% net. But, as I've already said, I'm sure each individual is affected differently depending on their particular financial circumstances - and it's not a competition!!

[BEagle]

In my case, it's perhaps because my deferred state pension (66% higher than the basic pension) has increased by a surprising 9.6% for 2024? Although I think that HMRC might have over-assessed me? Doubtless I'll find out when I submit my tax return in the coming weeks....

[Bob Viking]

Question

So why has my pension not increased at all then? I properly left the service at the end of September 2022 so it’s not a lack of time out that’s doing it. Is it because I’m not currently a UK tax payer? Does that prevent increases? My pension is paid into a UK bank account.

BV

[downsizer]

Originally Posted by Bob Viking

So why has my pension not increased at all then? I properly left the service at the end of September 2022 so it’s not a lack of time out that’s doing it. Is it because I’m not currently a UK tax payer? Does that prevent increases? My pension is paid into a UK bank account.

BV

Did you commute? How old are you? AIUI no rises till 55.

[Bob Viking]

DS

Of course. I forgot that bit. It should be a pretty healthy increase when it comes though.

Thankyou.

BV

[Bob Viking]

Quick question

They say there’s no such thing as a stupid question but let’s see. I am away from my files so can’t remember for certain and I have a niggling question that I’m sure someone can answer.

When the pension jumps back up after the abated period following a commutation does it jump back up with the cumulative effect of several years worth of inflationary increases?

For example being a 47 year old, assuming I jump back onto AFPS75 when offered, will my pension jump up at age 55 to the amount it would be following every years increase from now until then?

BV

[downsizer]

That is my understanding. First it jumps to what you would have got had you not commuted, then the inflationary %s are applied.

[ForcesPensionSociety]

Originally Posted by Bob Viking

They say there’s no such thing as a stupid question but let’s see. I am away from my files so can’t remember for certain and I have a niggling question that I’m sure someone can answer.

When the pension jumps back up after the abated period following a commutation does it jump back up with the cumulative effect of several years worth of inflationary increases?

For example being a 47 year old, assuming I jump back onto AFPS75 when offered, will my pension jump up at age 55 to the amount it would be following every years increase from now until then?

BV

After an abated pension, when pension increases are applied, they applied to the original award, not the abated award.

[Bob Viking]

DS and FPS

Thanks for your answers. I thought my memory was correct but didn’t have my paperwork with me and had a mild panic. I didn’t want to miss out on the big increases due to recent high inflation.

BV

[just another jocky]

Another question; I transferred from Regular to FTRS a few years ago from AFPS05. My pension was abated, though they never told me by how much, due to my FTRS salary taking me above my previous, full-time salary. A few years later and I am looking forward to proper retirement but I now really don't know whether the pension I currently receive will increase when I do retire or has the abatement vanished over the last 6 years? Not knowing how much my Regular service pension will be makes it difficult to plan financially for my retirement (I'm ignoring any McCloud outcomes for now).

Apologies if this is a dumb question.

[Ninthace]

What actions have you taken so far to find out?

[Biggus]

Just another jockey,

You used to be able to request a "pension forecast", which I believe most people found to be pretty accurate. If that option is still available it may help resolve your issue.