Armed Forces Pay Review 22
I've never heard of any 'capped maximum rise for UK Armed Forces Pensions regardless of the CPI', does such a thing actually exist?
CPI is now 10.1%, so if it's the same in September, I would assume that the next AFP rise in 2023 will also be 10.1%.
Regarding the UK State Pension, as I deferred my claim for several years, I receive an enhanced pension which is 67% higher than the normal state pension. Is any annual pension increase only applied to the normal state pension, or to the enhanced figure?
CPI is now 10.1%, so if it's the same in September, I would assume that the next AFP rise in 2023 will also be 10.1%.
Regarding the UK State Pension, as I deferred my claim for several years, I receive an enhanced pension which is 67% higher than the normal state pension. Is any annual pension increase only applied to the normal state pension, or to the enhanced figure?
The 5% cap applies to a lot of private sector defined benefit schemes, not as far as I am aware to public sector schemes.
However for private sector pensioners, this 5% cap is an average over the 'life' of the payment to an individual - so if you have had several years of <5% increases the 10+% due this year _should_ be paid in full. Check specific scheme documents for the detail!
BEagle - the uprating _should_ apply to the whole of the basic state pension. There were odd issues with SERPS upratings a few years ago, so a lot depends on when your normal pension age was...
However for private sector pensioners, this 5% cap is an average over the 'life' of the payment to an individual - so if you have had several years of <5% increases the 10+% due this year _should_ be paid in full. Check specific scheme documents for the detail!
BEagle - the uprating _should_ apply to the whole of the basic state pension. There were odd issues with SERPS upratings a few years ago, so a lot depends on when your normal pension age was...
I'm sure that, given the reintroduction of the 'triple lock', the basic state pension would be increased by CPI.
My state pension age was before 6 Apr 2016, so I was able to take advantage of the extra state pension scheme of 1% for every 5 weeks of deferral, ultimately reaching 67%.
My weekly state pension rate is £153.83 (normal) + £102.76 (deferred supplement) = £256.59. So if the state pension is increased by 10.1% for 2023, would that mean £169.37 (normal) + £113.14 (deferred supplement) = £282.51? Or £169.37 (normal) + £102.76 (current deferred supplement) = £272.13? DWP states that those who defer will receive 'a higher weekly State Pension for the rest of your life', so I'm hopefully assuming that the annual pension increase rate will apply to the whole of my pension.
Has anyone with a pre-6 Apr 2016 state pension age, who has deferred their application, any experience of this in previous years?
My state pension age was before 6 Apr 2016, so I was able to take advantage of the extra state pension scheme of 1% for every 5 weeks of deferral, ultimately reaching 67%.
My weekly state pension rate is £153.83 (normal) + £102.76 (deferred supplement) = £256.59. So if the state pension is increased by 10.1% for 2023, would that mean £169.37 (normal) + £113.14 (deferred supplement) = £282.51? Or £169.37 (normal) + £102.76 (current deferred supplement) = £272.13? DWP states that those who defer will receive 'a higher weekly State Pension for the rest of your life', so I'm hopefully assuming that the annual pension increase rate will apply to the whole of my pension.
Has anyone with a pre-6 Apr 2016 state pension age, who has deferred their application, any experience of this in previous years?
Beags,
I was 65 in 2008 and I spent some time doing the maths and considered in my case it wasn't worth it, so I didn't take the option.
Looks like you'd foregone about six and a half years of your pension.
My State Pension is £224-13 consisting of a basic SP of £141-85 plus a pre '97 addition of £34-11 plus post '97 of £42-66 plus graduated retirement benefit (whatever that is) of £5-51.
As far as I'm aware the triple lock only applied to the basic SP and the rest was increased by a smaller amount
It was difficult to get a definite answer from the Forces Pensions Society especially if you were still working - and I was.
So, don't know whether it was the right or wrong decision !
I was 65 in 2008 and I spent some time doing the maths and considered in my case it wasn't worth it, so I didn't take the option.
Looks like you'd foregone about six and a half years of your pension.
My State Pension is £224-13 consisting of a basic SP of £141-85 plus a pre '97 addition of £34-11 plus post '97 of £42-66 plus graduated retirement benefit (whatever that is) of £5-51.
As far as I'm aware the triple lock only applied to the basic SP and the rest was increased by a smaller amount
It was difficult to get a definite answer from the Forces Pensions Society especially if you were still working - and I was.
So, don't know whether it was the right or wrong decision !
I'm sure that, given the reintroduction of the 'triple lock', the basic state pension would be increased by CPI.
My state pension age was before 6 Apr 2016, so I was able to take advantage of the extra state pension scheme of 1% for every 5 weeks of deferral, ultimately reaching 67%.
My weekly state pension rate is £153.83 (normal) + £102.76 (deferred supplement) = £256.59. So if the state pension is increased by 10.1% for 2023, would that mean £169.37 (normal) + £113.14 (deferred supplement) = £282.51? Or £169.37 (normal) + £102.76 (current deferred supplement) = £272.13? DWP states that those who defer will receive 'a higher weekly State Pension for the rest of your life', so I'm hopefully assuming that the annual pension increase rate will apply to the whole of my pension.
Has anyone with a pre-6 Apr 2016 state pension age, who has deferred their application, any experience of this in previous years?
My state pension age was before 6 Apr 2016, so I was able to take advantage of the extra state pension scheme of 1% for every 5 weeks of deferral, ultimately reaching 67%.
My weekly state pension rate is £153.83 (normal) + £102.76 (deferred supplement) = £256.59. So if the state pension is increased by 10.1% for 2023, would that mean £169.37 (normal) + £113.14 (deferred supplement) = £282.51? Or £169.37 (normal) + £102.76 (current deferred supplement) = £272.13? DWP states that those who defer will receive 'a higher weekly State Pension for the rest of your life', so I'm hopefully assuming that the annual pension increase rate will apply to the whole of my pension.
Has anyone with a pre-6 Apr 2016 state pension age, who has deferred their application, any experience of this in previous years?
My State pension age was Dec 2010, but I deferred by 5 years for a 50% uplift. I have just checked my Apr 2022 notification of payment rates against my Apr 2021 notification and this showed the following increases:
Basic State Pension went up by 3.09%
Pre 97 additional State Pension: 3.10%
Post 97 additional State Pension: 3.05%
Extra basic sState Pension: 3.11%
Extra additional State Pension: 3.12%
Graduated Retirement Benefit: 3.06%
This would seem to indicate that the same uplift is applied to all elements.
Thanks very much for the info., Paying Guest!
Deferring has suited me well, although the change in tax code and reduced monthly AFP payments to reflect the State Pension will probably take a while to settle down.....
Deferring has suited me well, although the change in tax code and reduced monthly AFP payments to reflect the State Pension will probably take a while to settle down.....
Gentleman Aviator
BEags et al
Another factor to add into whether or not to defer the State Pension is of course National Insurance . At whatever age you take the State Pension (if you are still working) you also stop paying NI contributions, which can be a significant figure.
But it remains a personal decision informed by personal factors.
Another factor to add into whether or not to defer the State Pension is of course National Insurance . At whatever age you take the State Pension (if you are still working) you also stop paying NI contributions, which can be a significant figure.
But it remains a personal decision informed by personal factors.
Excuse my ignorance but does/will my RAF pension get reduced when i claim my state pension?
No it won't! Your gross AFP will remain unchanged but there will be an amendment to your tax code to take your state pension (which is paid gross) into account.
For example my monthly net amount for July was £162.20 less than for June. This was due to a tax code change and took into account estimated tax owed for 2022-2023 when I started receiving my basic state pension. As that didn't take the deferred extra into account, I fully expect a further reduction in net AFP from August.
For example my monthly net amount for July was £162.20 less than for June. This was due to a tax code change and took into account estimated tax owed for 2022-2023 when I started receiving my basic state pension. As that didn't take the deferred extra into account, I fully expect a further reduction in net AFP from August.
I was taken by surprise when I got the letter from HMRC saying my tax code had changed from 1470L to 1010L due to now being in receipt of the state pension. They get 40% of it back anyway.
3.75% for those still serving seems pretty miserly.
Whereas according to the CTP website, Armed Forces pensions, once awarded, are adjusted in April each year by the Consumer Price Index (CPI). The CPI rate used is the CPI headline rate for the September prior to the April adjustment the following year. This rate is formally announced in October each year.
But with CPI at around 9.4%, do we really anticipate the government holding to this agreement? Perhaps encouraging is the announcement that, for the State Pension, the 'triple lock' will be applied for 2023....meaning a rise in accordance with inflation.
Whereas according to the CTP website, Armed Forces pensions, once awarded, are adjusted in April each year by the Consumer Price Index (CPI). The CPI rate used is the CPI headline rate for the September prior to the April adjustment the following year. This rate is formally announced in October each year.
But with CPI at around 9.4%, do we really anticipate the government holding to this agreement? Perhaps encouraging is the announcement that, for the State Pension, the 'triple lock' will be applied for 2023....meaning a rise in accordance with inflation.
Simple.
Not so sure having read your link LJ. The final sentence had the words ‘normally formalised in law in January’, which to my mind in these uncertain times, may offer a get out clause to whoever is running our country then!
