Originally Posted by
Lima Juliet
NATOPotato - sadly various Governments have agreed to
rob tax our pension arrangements over the years. In 2006 LTA was £1.5M and so it didn’t affect most of us (apart from CDS), then by 2011/12 it was up to £1.8M before the gradual reductions happened. It was only really when it got to about £1.25M that any of us started noticing in 2014/15. Now it reduced to £1M in 2016/17 and then went up with inflation to £1.073M by 2020/21 and then it was frozen. Now with eye-watering inflation it is really starting to bite.
There are many reasons for this
grab taxation of pension - economic challenges from the 2007 crash, “Austerity”, Brexit, COVID, Russia vs Ukraine, etc… etc… But the bottom line is that it affects a small, say 3-5% of the population, and so most politicians don’t care right now. I think that is starting to shift as they are seeing more people quit their well-paid jobs (inducing a “brain drain”) that is starting to see fewer, Doctors, Judges, Lawyers,
VSOs, high-end Civil Servants all starting to quit early. When the wheels start to come off of the wagons that these folks support, just maybe then we’ll see the politician’s and HMT’s ears starting to prick up.
But until that happens, if it does, then we just have to suck it up…
Sadly its not just the VSOs now, I've just had a read through this thread as I get kicked out within the next couple of years (@59 yrs 364 days), and it look like I'm going to face a pretty big tax bill as my welcome to retirement - how's that for a 60th birthday present? Just done the calculations based on the info earlier in this topic and it appears that my 75/05/15 pension x 20 (at today's figures) will take me to the LTA and that's before the gratuity is added.
In addition, as one of the cohort who was barred from transferring to AFPS 15 due to age at the time, my pension calculator is currently only showing 1 year's service on 15, when I might be entitled to a total of 9 years - so it could get worse.
Anyone got any suggestions on how to minimise the tax bill?