APFS 05/PA help

[just another jocky]

This has probably been asked before but I can't find an answer using the search facility, so here goes:

Is there anyone recognised as a knowledgeable advisor on PA/AFPS (05 for me)? I need to make some decisions and would like implications explained in laymans/simpletons terms (cos that's how I am :O) regarding departure at various points and the implications of each on pension/EDP versus leaving when due at age 55 years. Basically, is it better to leave now (NO comments like "of course, why would you want to stay?" etc please :=), leave age 54 and get a lower pension to 65 but 2 x EDP or stay the extra year and get full pension immediately. I appreciate this depends upon my life ambitions/position which is why I don't really want to discuss it on here but speak to someone who can 'keep it simple'. :ok:

Thanks in advance. :)

P.S. I have 3 examples from the pension calculator but the implications of each set of figures kind of eludes me...:O

[bwfg3]

Without going into things too deeply ( cos I cant remember details) It boils down to Jam today.. one bigger payoff plus bigger pension, or jam tommorrow with two EDP and lower pension till 65. I did the Maths and there wasn't much in it as I recall.( However I stand by to be corrected)

[Spurlash2]

Not knowledgeable:hmm: but do the sums on a spreadsheet for your 3 scenarios. You will see exactly what you will receive per month.
Yes, leaving at 54 gives you 2 EDP's, but who says you will be around to get your hands on the final one at 65?
If you are within a couple of years of 55, stay and get the full whack. I'd rather live rich, rather than be dead rich:ok:
But if you have a job to go to now; go!

[LFFC]

Does anyone know if the second lump sum payment would be paid to your estate if you died before reaching 65? If not, then statistics would suggest being cautious about taking that payment into account when you do your sums.

[just another jocky]

Thanks for that guys...if I knew how to use Excel I would probably know enough to not ask the original question. Sorry.

Anyone know an advisor?

Come on, you lot that have left must have had some advice from somewhere?

[Yeller_Gait]

Jocky,

To be honest you have already had enough good advice on this thread to be able to make a reasonable decision, perhaps if you are not clever enough to use Excel you are not clever enough to appreciate the advice you have been given.

If you have a worthwhile job to go to now, Go.

If not stay till 55 and take the bigger pension.

Have not seen an answer to the question about death before 65, but ..............


Y_G

[just another jocky]

Jocky,

To be honest you have already had enough good advice on this thread to be able to make a reasonable decision, perhaps if you are not clever enough to use Excel you are not clever enough to appreciate the advice you have been given.

...

Y_G

Thanks for nothing Y_G :ooh:.

I had taken on board the pertinent points, however I would like more detail about those points. Personally, I have a lot of responsibilities (family) to consider before I make a decision and so would care for somewhat more detailed advice, especially regarding tax and the levels at which I will be paying it in each circumstance.

Your reply smacks of an arrogance unwarranted in my question. If it was unintended then I apologise, but that's what it feels like. You may note that in my original post I asked for information about an advisor, not advice from members.

I ask again, does anyone have an advisor (ie a professional) that they use or have used who is knowledgeable in the ways of AFPS 05/PA etc?

[Yeller_Gait]

jaj,

I apologise, no offence was meant.

The only professionals I can think of are the Armed Forces Pension Service. Not sure of their contact details but they have appeared in similar topic threads in the past. Again I am not sure how current they are with regard to PAS but they will be better than nothing.

Y_G

[just another jocky]

OK, thanks.:)

[Ginseng]

Ref your question on the second lump sum in case of death before the age of 65:

JSP 764 Part 1, 0411 (Death after leaving Service - Deferred Member):

"If a deferred member dies, his deferred pension lump sum will be paid to his nominated recipient(s), his spouse, civil partner or eligible partner or, if he has no dependants, to his estate. This lump sum will be adjusted to take account of inflation between his discharge and his death and the resulting lump sum will be tax free."

I take this to mean that, where there is a nominated recipient, spouse, civil partner or eligible partner to receive the payment, then the payment is made ouutside of the member's estate and is therefore not subject to any potential Inheritance Tax liability on the estate. consult an expert for confirmation.

Regards

Ginseng

[[email protected]]

Jocky, I used the pensions calculator for 2 scenarios - one staying to 55 and getting full pension and one lump sum and the other leaving at 54 and getting EDP and 2 lump sums. If I didn't work between the age of leaving and 65 the amount received was within 2 or 3k, with the 55 option coming out on top.

If you plan to work when you retire from the mob then by the time you get to 65 you will be miles ahead financially.

[Biggus]

Not sure I believe your 'pensions calculator' example.

My expert on this is..... me! Do the research, then the sums, it's not hard.

Ok, here are the two options (I will ignore the effect of inflation to make the sums easier.

OPTION ONE - Serve to 55.

Easy, retire on full (100%) pension. One tax free lump sum of 3 x pension.
Let us use an example of a pension of £32,000. So, we have at 55 a lump sum of £96,000 and an annual pension of £32,000

OPTION TWO - SERVE TO 54.5.

Assuming pension earned is still £32,000. Retire on 75% of pension, £24,000. Tax free lump sum of £96,000 still.

Now between 54.5 and 65 the pension is only £24,000, compared to £32,000 in option one - a loss of 10.5 x £8,000 = £84,000. HOWEVER, and this is the point, under option one that extra £84,000 earned would have been taxed, so it would have only been say £63,000 in your pocket. Which means that under option 2 you are so far down £63,000. But at 65 you get another tax free lump sum of £96,000 - meaning YOU ARE £33,000 UP OVERALL!

Whichever way you look at it you make more money under option 2, in terms of about 100-120% of your pension.

The decision as to which option to take will depend on such factors as:

Do you expect to live to 65?
Do you need to maximise your income at 55, or are you planning a second career and can afford to wait until 65 for maximum pension income?
etc, etc.....

[just another jocky]

Thanks crab and Biggus, what you say falls in line with my thinking. I have 3 pension calculator examples, the third of which is leaving next year, just to gauge it.

PVR'ing in the 54th year does indeed appear to be a more financially prudent move (indeed a friend of mine has just retired somewhat early for that very reason). I don't intend to cease working for a living at 55 so the tax-free bonus of the 2nd lump sum does appear inviting.

Many thanks all. :ok: