Originally Posted by
Bob Viking
I had to post immediately after reading this. That is the single best post I have ever seen on this or any other forum. You have absolutely nailed the issue. I could rant on for ages with further examples to support your statements but I needn’t bother. You said it all perfectly.
BV
Not quite true on the pension front, either though BV. The AFPS75-heavy pension is not as good as AFPS05 or AFPS15 in some circumstances - you need to do the maths. The AFPS15 is better than all of them if you serve from 18 to 60 - that is because it accrues at 1/47 throughout those 42 years compared to the other 2. Those joining now as JO Aircrew at age 18, going to PAS mid career as JO Aircrew and leaving at age 60 as PAS JO Aircrew will likely accrue the rights to an AFPS15 pension of roughly £60k (in today’s money index linked to tomorrow’s money). To buy an annuity paying that same level of annual pension, index linked and with provision for your partner would likely need a pension pot of £2.5M. So, £2.5M divided by 42 years is roughly £60k per year, or £5k a month. Now you would be able to invest that at £5k per month before tax, so it would only cost you £3K of your salary. But that is still a heck of a lot of money.
How does that £60k at age 60 on AFPS15 compare to AFPS75 - with the PAS supplements added it would pay about £36k according to the pension tables. For AFPS05 it would pay 42/70ths of PAS Level 30 - which is £51k. So the AFPS15 is the best of breed for those going to age 60.