Oh and I also heard that HRMC are looking into taxing the 'Early Departure Payment' for those on AFPS05.
Generally speaking, if the talk about cutting back on the EDP benefit is pretty comparable to taking tax free cash from a personal pension, then there has been talk of taxing that doing the rounds too. Nothing definite, nothing certain, just a reflection by GO that GO has to find more money from somewhere! If we assume that the very last benefits he will cut are going to be child related allowances for the lower paid, how much further up the list will tax free cash from pensioners be?
HMRC is looking at taxing anything and everything at the moment - its not personal to HM Forces if thats any consolation. We can probably say goodbye to VCTs pretty soon, and there are lots of disturbing reports being bandied around by charities representing the lesser paid, regarding pension contribution tax relief. So,
in general, consider diversifying away from an unhealthy over obsession with any one particular pension scheme and strategy, and consider all options including Offshore Bonds, personal pensions for a wife/husband who doesn't have a large personal pot (unrelated to the size of their tum), maxxing out on an ISA and now of course, the Junior ISA too.
See your bank salesman, an IFA, phone a friend.. but the sooner you do
something the better.