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Old 25th Feb 2012, 09:02
  #202 (permalink)  
LFFC
 
Join Date: Jun 2005
Location: UK
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Quazzi,

I don't think the government will single out the military by taxing gratuities as such, but it's possible that they may start taxing all pension lump sum payments. If they did that for the whole country, then they could easily justify taxing military gratuities. However, that would be a very bold move and another great disincentive to making pension payments; so I don't think it's going to happen.

What's far more likely is another reduction in pension contributions - down to possibly £30,000 a year - so that rich contributors can benefit far less. That would catch many more people out, be accepted by the general population and placate the Lib Dems! However, it might also hit people on final salary pension schemes if they get promoted! Which of course makes it more important to push through pension reform, which is exactly the government's aim. So if you think you're safe because you're within your last 10 years - watch out; do your sums before seeking promotion!
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