Reduction in pension.....
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Reduction in pension.....
I've just been on the mod pension calculator, to see how much it had increased since our payrise on the 31/3
The lump sump had actually gone down by £1, although to be fair, my annual pension had gone up by £3 to compensate for this loss.
I appriciate that a level one ground trade sgt get the same pension as a level seven aircrew sgt on top rate flying pay (!!**??£) but but how can the figures go down after a pay rise.
(I know the calculator is only there for guidance purposes, but it must be relatively accurate.........)
Link to calculator
The lump sump had actually gone down by £1, although to be fair, my annual pension had gone up by £3 to compensate for this loss.
I appriciate that a level one ground trade sgt get the same pension as a level seven aircrew sgt on top rate flying pay (!!**??£) but but how can the figures go down after a pay rise.
(I know the calculator is only there for guidance purposes, but it must be relatively accurate.........)
Link to calculator
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Advice
On the same subject but from a different angle.......
If you get EDP then emigrate, you can claim the tax back, BUT the pension will not index link at age 55 and 65, for the sake of a few quid in tax, you will be better off in the long run, if you are 55 already I dont think it makes much difference, but beware the smiling taxman, he'll shake your hand while stealing your wallet.
If in doubt press the tax office for written advice on your individual case
If you get EDP then emigrate, you can claim the tax back, BUT the pension will not index link at age 55 and 65, for the sake of a few quid in tax, you will be better off in the long run, if you are 55 already I dont think it makes much difference, but beware the smiling taxman, he'll shake your hand while stealing your wallet.
If in doubt press the tax office for written advice on your individual case
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Goneeast
I thought that the EDP was exempt of tax any way, irrespective of migration, just like a gratuity payment if you complete to a pension option?
DFM
I thought that the EDP was exempt of tax any way, irrespective of migration, just like a gratuity payment if you complete to a pension option?
DFM
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Goneeast,
Looked in the JSP and ........
Looked in the JSP and ........
CALCULATION OF EDP, PAYMENT PROFILE AND PRICE
PROTECTION
PROTECTION
0206. EDP is first available at the point at which an individual BOTH completes
18 years’ (or more) service AND is at least 40 years old. This point is known as the
‘EDP 18/40 Point’. Individuals will hit this point after different periods of service,
as can be seen in the examples in para 0207. At the EDP 18/40 Point, the following
becomes due:
(a) a tax-free lump sum, calculated by multiplying
18 years’ (or more) service AND is at least 40 years old. This point is known as the
‘EDP 18/40 Point’. Individuals will hit this point after different periods of service,
as can be seen in the examples in para 0207. At the EDP 18/40 Point, the following
becomes due:
(a) a tax-free lump sum, calculated by multiplying
3/70 of the individual’s
relevant earnings
by the length of their calculation service, on the
member’s day of departure, and
(b) from the date of departure until age 55, a taxable payment (with no
National Insurance liability) calculated by multiplying 1/140 of the individual’s
relevant earnings by their calculation service expressed as a monthly sum,
paid in arrears.
There is more in the JSP that is worth reading but as I see it, irrespective of staying or "going East", your EDP is still tax free and once again at the 65 point. The fact that your EDP or pension at 55 and 65 are not index linked is a quirk of the Commonwelath system of bi-lateral agreements wrt taxation and pension laws. e.g. you retire in the USA and your pension is index linked, you emigrate to Australia (for example) and it isn't, neither is your state pension!
Hope this helps
DFM
member’s day of departure, and
(b) from the date of departure until age 55, a taxable payment (with no
National Insurance liability) calculated by multiplying 1/140 of the individual’s
relevant earnings by their calculation service expressed as a monthly sum,
paid in arrears.
There is more in the JSP that is worth reading but as I see it, irrespective of staying or "going East", your EDP is still tax free and once again at the 65 point. The fact that your EDP or pension at 55 and 65 are not index linked is a quirk of the Commonwelath system of bi-lateral agreements wrt taxation and pension laws. e.g. you retire in the USA and your pension is index linked, you emigrate to Australia (for example) and it isn't, neither is your state pension!
Hope this helps
DFM
WRT Commonwealth countries:
My understanding is that the Air Force pension is Index-linked from 55 under the 1975 scheme even if you emigrate.
It is only the State pension at 65 that is not Index linked
My understanding is that the Air Force pension is Index-linked from 55 under the 1975 scheme even if you emigrate.
It is only the State pension at 65 that is not Index linked
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goneeast,
I sincerely hope, and think, you are wrong. As far as I am aware it is only the state pension that is not index linked if you emigrate to certain countries. An armed forces pension, either 75 or 05 is indexed linked at the appropriate times regardless of whether you have emigrated or not.
If you have any sources for your quote above, I and many others would be most interested to read it.
A group of emigrants in Canada are currently challenging (in the European Court) the rule that states that their UK state pension is not index linked. This has been an on-going situation for many years. I am not sure when any ruling is expected, but if anyone else has any info ...
With regard to getting a non-index linked state pension if you have emigrated, it is worth looking at reverse commutation if you can get by without taking your state pension at the first opportunity.
Y_G
If you get EDP then emigrate, you can claim the tax back, BUT the pension will not index link at age 55 and 65
If you have any sources for your quote above, I and many others would be most interested to read it.
A group of emigrants in Canada are currently challenging (in the European Court) the rule that states that their UK state pension is not index linked. This has been an on-going situation for many years. I am not sure when any ruling is expected, but if anyone else has any info ...
With regard to getting a non-index linked state pension if you have emigrated, it is worth looking at reverse commutation if you can get by without taking your state pension at the first opportunity.
Y_G
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I have recently asked HM Revenue and Customs about index linking of both my armed forces pension and state pension if I emmigrate to a commonwealth country.
The armed forces pension is indexed linked in exactly the same way as if I had remained in the UK, i.e. EDP lump sum on leaving HM forces is tax free, EDP payments to 55 are taxed and not indexed linked, EDP payments from 55 are indexed linked and taxed. Preserved pension lump sum is indexed linked from the day you left the service and is tax free. Preserved pension payments from 65 are also index linked back to the day you left the service and are taxable.
The state pension is currently not indexed linked. But hopefully the challenge in the European Court will alter this unfair anomally.
Flo
The armed forces pension is indexed linked in exactly the same way as if I had remained in the UK, i.e. EDP lump sum on leaving HM forces is tax free, EDP payments to 55 are taxed and not indexed linked, EDP payments from 55 are indexed linked and taxed. Preserved pension lump sum is indexed linked from the day you left the service and is tax free. Preserved pension payments from 65 are also index linked back to the day you left the service and are taxable.
The state pension is currently not indexed linked. But hopefully the challenge in the European Court will alter this unfair anomally.
Flo
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Im sure that you are right about the index linking if you emigrate to certain countries (commonwealth, USA etc) just get advice in your own case when you emigrate to another country.. as I have. When I mentioned EDP I didnt mean the lump sums, I meant the monthly pension payments..
As I said, be aware and get advice, the tax office has different arrangements with different nations. We've earned our pensions, so dont lose out through poor advice.
As I said, be aware and get advice, the tax office has different arrangements with different nations. We've earned our pensions, so dont lose out through poor advice.
