I've said this before....!!!!
A 2.9%, split into 2%, then 2 chunks of non-contributable 0.9% was effectively a wage advance that no-one wanted.
It was claimed back automatically when we got 2.9% again (we'd already had 0.9%), so everyone got real-terms 2% again!
We were promised 6.5% over 3 years! So don't expect the maths to add up!!!!!
2.9% + 2.9% = 5.8%, so expect 0.7% (below Austerity, but likely to be blamed on Covid-19)
2% + 2% with 0.9% already borrowed and paid back = 4.9%, so you should be getting 1.6% after Austerity. Brace yourselves for it...!!!
It took the Govt 4 Months to dream up this Smoke & Mirrors, but I saw through it in 4 Seconds - Just 1 of the reasons I decided to leave for the Private Sector!!!
BIG TIP (My Opinion Only - Please take advise from Forces Pension Society or other IFA!!!!!!!!!!!!!!! - it depends on each individual circumstances!!!!!!!!!!!!):
If you commutate your pension, so ALL your lump sum is tax free (mine got me debt-free!) & your remaining annual pension falls just short of/close to £12500, then call HMRC and get your 1250L tax code (or other tax-code/amount if you borrow from your spouse) allocated to it!
As an Agency driver, my MOD Pension#1 is now 100% tax-free, I only pay tax on my sporadic/random work days (~3 days each week!!!!). If I only work 1 day, I get an NI credit, but only pay tax for 1 day - If I work 5 days, I get an NI credit and pay 5 days of tax!
If I get a full-time job, then I may probably change it to my larger guaranteed income!!
Any rebate between MOD Pension#1 and Tax-Code each April gets thrown into WorkPlace Pension Pot#2, although I might have to make a 1-off NI Contributrion to cover a 5-week training period in November, paid for by CPT/myself, so no earnings for that period.
Last edited by unclenelli; 21st Mar 2020 at 15:26.