Pension Question
Thread Starter
Pension Question
I have a question that hopefully fellow retired military UK members of Pprune might be able to answer.
I am trying to establish the lifetime allowance I have used with my AFPS 75 pension but I am confused about the figures. If I do the Pension x 20 plus Gratuity calculation, I end up with about 54% LTA figure
My P60 statements however, speak about lifetime allowance used as about 25% and my letter on leaving the service also spoke about 25%
Is the P60 statement the definitive record of LTA or is it referring to something else and why is it so different from the pension x 20 calculation?
Is LTA calculated on the figure provided at retirement or does it change with CPI changes i.e. Inflation this year will likely raise Military pensions by some 10%, does this affect the LTA figure.
Before someone mentions it, I have written to the SPVA but don't know how long it will be before I get an answer and their response may still confuse me and yes, I am a member of the AFP Society
Grateful for any light that can be shed on these figures.
I am trying to establish the lifetime allowance I have used with my AFPS 75 pension but I am confused about the figures. If I do the Pension x 20 plus Gratuity calculation, I end up with about 54% LTA figure
My P60 statements however, speak about lifetime allowance used as about 25% and my letter on leaving the service also spoke about 25%
Is the P60 statement the definitive record of LTA or is it referring to something else and why is it so different from the pension x 20 calculation?
Is LTA calculated on the figure provided at retirement or does it change with CPI changes i.e. Inflation this year will likely raise Military pensions by some 10%, does this affect the LTA figure.
Before someone mentions it, I have written to the SPVA but don't know how long it will be before I get an answer and their response may still confuse me and yes, I am a member of the AFP Society
Grateful for any light that can be shed on these figures.
Sorry for the hijack.
Something occurred to me this week in light of the upcoming budget statement. If the chancellor increases the LTA what happens to members of the military who have been caught in the LTA/Tax trap? Some people (usually senior officers) have ended up paying a tax bill based on their predicted notional pension pot. If the LTA goes up do they get a rebate or is it just tough sh1t?!
Sorry I can’t help with your actual question.
BV
Sorry I can’t help with your actual question.
BV
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Thread Starter
Thank BV, I am not in that situation yet but there will be a lot of GPs who are. I think that may be why the Treasury are looking at changes, to entice them back into work, so maybe there will need to be some retrospective calculation.
W, if u r in receipt of pension (the LTA % figure would seem to suggest you are) then the LTA used was what happened when you had that Benefit Crystallisation Event that was probably when the LTA was higher (£1.25m 15-16 or £1.5m in 13-14). As it’s barely above £1m now probably the former. The LTA % will not change until you have another BCE (second career or private pension). BV - there will be no retrospective, as the LTA has dropped there were Individual Protection schemes (14 and 16 that still exists) and Fixed Protection. The LTA in use will be the one dictated by the government of the day when you elect to have a BCE. The BCE ‘tests’ your LTA to see if you get a tax bill. Hope this helps?
Thread Starter
GreenXCode thanks for the reply.
My main query is which figure I use because I cannot rationalise the 20x pension plus gratuity which comes out at about 54% and the P60/Benefit letter number which is about 25%.
My main query is which figure I use because I cannot rationalise the 20x pension plus gratuity which comes out at about 54% and the P60/Benefit letter number which is about 25%.
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BV, I wonder if your mention of a 'predicted' pension pot means that you are thinking of the tax bills incurred when senior officers exceed the annual allowance? The LTA is only assessed when the pension pot stops being 'predicted'. Changes to the LTA will only benefit those yet to retire; anyone who has already paid tax on their retirement won't get it back. If you are thinking of the annual allowance, then what's done is also done, perhaps with the interesting exception of the McCloud remedy and a retrospective decision to switch from AFPS15 to AFPS75 for 2015-2022, which could generate some quite spectacular increases in those years if promotions were involved and which might be out of HMRC's retrospective reach by the time an individual makes their selection. (If that accrual was treated as having occurred in the retirement year, that would not meet the requirement of putting individuals in the same position as if the illegal discrimination had never occurred).
I have a question that hopefully fellow retired military UK members of Pprune might be able to answer.
I am trying to establish the lifetime allowance I have used with my AFPS 75 pension but I am confused about the figures. If I do the Pension x 20 plus Gratuity calculation, I end up with about 54% LTA figure
My P60 statements however, speak about lifetime allowance used as about 25% and my letter on leaving the service also spoke about 25%
Is the P60 statement the definitive record of LTA or is it referring to something else and why is it so different from the pension x 20 calculation?
Is LTA calculated on the figure provided at retirement or does it change with CPI changes i.e. Inflation this year will likely raise Military pensions by some 10%, does this affect the LTA figure.
Before someone mentions it, I have written to the SPVA but don't know how long it will be before I get an answer and their response may still confuse me and yes, I am a member of the AFP Society
Grateful for any light that can be shed on these figures.
I am trying to establish the lifetime allowance I have used with my AFPS 75 pension but I am confused about the figures. If I do the Pension x 20 plus Gratuity calculation, I end up with about 54% LTA figure
My P60 statements however, speak about lifetime allowance used as about 25% and my letter on leaving the service also spoke about 25%
Is the P60 statement the definitive record of LTA or is it referring to something else and why is it so different from the pension x 20 calculation?
Is LTA calculated on the figure provided at retirement or does it change with CPI changes i.e. Inflation this year will likely raise Military pensions by some 10%, does this affect the LTA figure.
Before someone mentions it, I have written to the SPVA but don't know how long it will be before I get an answer and their response may still confuse me and yes, I am a member of the AFP Society
Grateful for any light that can be shed on these figures.
Thread Starter
So just by way of update, I got a very quick reply from the SVPA. They confirm that it is the figure on your P60 that stipulates what your LTA use is. I think the lightbulb is coming on that my LTA is applied against what was a £1,800,000 limit in 2011/12 and does not get affected by any future changes to that limit (effectively frozen in time?) until and as GreenX states, I get another Crystallisation event (BCE). For a lot of ex Service persons, that will usually be a company pension during a second career. It looks like the LTA might get moved back to £1.8 Million again tomorrow, so my next BCE might well be under the same criteria.
Please do let me know if I have got any of this wrong
Please do let me know if I have got any of this wrong
Correct W but do not mix % with real money. If u hv used 25% then you hv 75% left. In today’s terms that’s 75% of today’s LTA of £1.0731m left before a penalty is applied at a BCE. There will be some unhappy people when the LTA is raised tomorrow esp for those that were expecting an LTA of £1.0731m frozen until 2026…
At LTA threshold
Having been a member of AFPS 75 for 30 years, I was at the LTA threshold, so opted out of the pension scheme of my current employer, instead investing my contribution conventionally. I made an enquiry about rejoining the scheme, but the buy-in cost would be unaffordable, appparently. But then I can't complain - having been invalided out of the Service due to my Service, I don't pay tax on my military pension; in reality any other pensions would have little impact on my receivables, and of course, would be taxed. However, if I joined the pension scheme, it would give me (well, my family) pretty decent death-is-service benefits.
Last edited by Whenurhappy; 16th Mar 2023 at 10:16.
As Easy Street has previously mentioned (IIRC), thru’ our lens a note of thnx to the Fire Brigades’ Union and doctors. Just a shame it’s short lived until the opposition get in, but perhaps we’ll get IP25 to afford those of us lucky enough to be affected. Like others, no retrospective action as a penalty for promotion and then retirement tax instead of just giving the watch back. I’ll get my coat but am lucky enough to have secured an Extension of Service under 75/15…
