One way round this issue for those in the colonies is not to take the UK Pension and instead go for your country of residences pension instead.
That way you don't end up with a frozen (non-indexed linked) UK OAP and your military pension abated but have, in my case, NZ Superannuation (increasing) plus my full UK service pension.
Strangely, at current rates, NZ Super is actually more than the UK OAP after tax for me as well
