Pensions Alert
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Pensions Alert
Have just received some interesting info from the Governments latest Green Paper on pensions which will motivate us all packing to go to sandy places. I'm no pensions expert, but the implications for the forces could be massive. Here's some of the highlights:
“the Government intends to set a minimum age at which
tax-privileged pension benefits can be drawn – the minimum benefit age – at 55 in 2010."
“In the new tax rules, the minimum benefit age will apply to all pension schemes which qualify for tax relief, including those special schemes for particular trades where people may retire at a relatively young age. From 2010, people in these schemes
will not be able to draw benefits until age 55, whether or not this is the point at which they stop work in this line of business."
In summary then, it appears to me that anyone retiring after 2010, who has not reached their 55th birthday will not recieve any pension until their 65th birthday. Worryingly, the green paper makes no mention of gratuities. If this will apply to the forces then I guess we will all have to "retire" at the first available option point or lose benefits worth tens of thousands of pounds. This is especially galling after MPs voted themselves a 20% increase in pension benefits. A useless MP who gets kicked out after just four years receives about £6500 per year for life. This would require a pension fund of nearly £120000. Naturally, they are not tinkering with their own security. If this does apply to the forces it will completely redefine "retention problem!!!
Round&Round
“the Government intends to set a minimum age at which
tax-privileged pension benefits can be drawn – the minimum benefit age – at 55 in 2010."
“In the new tax rules, the minimum benefit age will apply to all pension schemes which qualify for tax relief, including those special schemes for particular trades where people may retire at a relatively young age. From 2010, people in these schemes
will not be able to draw benefits until age 55, whether or not this is the point at which they stop work in this line of business."
In summary then, it appears to me that anyone retiring after 2010, who has not reached their 55th birthday will not recieve any pension until their 65th birthday. Worryingly, the green paper makes no mention of gratuities. If this will apply to the forces then I guess we will all have to "retire" at the first available option point or lose benefits worth tens of thousands of pounds. This is especially galling after MPs voted themselves a 20% increase in pension benefits. A useless MP who gets kicked out after just four years receives about £6500 per year for life. This would require a pension fund of nearly £120000. Naturally, they are not tinkering with their own security. If this does apply to the forces it will completely redefine "retention problem!!!
Round&Round
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Soddim,
It is a frequent misconception that our pensions are non-contributary. This is not the case. Our salary is abated to factor in our pension contribution. The AFPRB report normally discusses this although I haven't checked this years tome.
So we do contribute to our pensions
It is a frequent misconception that our pensions are non-contributary. This is not the case. Our salary is abated to factor in our pension contribution. The AFPRB report normally discusses this although I haven't checked this years tome.
So we do contribute to our pensions
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Stan, having had my pay abated for years because of my non-contributary pension I am well aware that the forces pensions are indeed paid for by the recipient. However, they are not paid directly and therefore do not attract the tax-fovourable treatment given to contributary pension contributions. It would therefore seem to me that maybe they will not be affected by this measure.
It would in any case be grossly unfair to delay payment of forces pensions until age 55. The fighting men and women of our forces should be able to stop fighting long before that age.
It would in any case be grossly unfair to delay payment of forces pensions until age 55. The fighting men and women of our forces should be able to stop fighting long before that age.
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round & round,
got the "circular" e-mail forwarded and passed it on too. It has also been sent to the dark blue chaps at a high level for their info and reactions ...
It looks very worrying, I (and a considerable number of colleagues) may / will have to bail out before planned dates in order to get an immediate pension.
we await developments and further enlightenment.
got the "circular" e-mail forwarded and passed it on too. It has also been sent to the dark blue chaps at a high level for their info and reactions ...
It looks very worrying, I (and a considerable number of colleagues) may / will have to bail out before planned dates in order to get an immediate pension.
we await developments and further enlightenment.
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I think it's a good point about non-contributory or not.
The answer is that no one knows where we fall. What is worrying though is that the government has published this paper without any clarification. I know of people who have written to their MPs and PMA, but so far a stunning silence. Until the situation is clarified I think we all need to be aware, as the implications could be very severe.
Round&Round
The answer is that no one knows where we fall. What is worrying though is that the government has published this paper without any clarification. I know of people who have written to their MPs and PMA, but so far a stunning silence. Until the situation is clarified I think we all need to be aware, as the implications could be very severe.
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I think that if they do tax gratuities, then this may prove to be the proverbial "straw"....I can see no reason to continue to serve with the Forces as they continually shift goalposts to suit the taxman.....
To hell with the UK Govt. Time to "contract out".
Any silver linings out there, guys?
To hell with the UK Govt. Time to "contract out".
Any silver linings out there, guys?
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Pension??
Yet another stealth manoeuvre by this Govt who seem to be taking us for granted.
One rule for the politicians 20% pensions benefit hike and another rule for those who are willing to risk life and limb for a 3.2% before-tax pay rise!
It would be nice to think that a clear, unspun message would be issued soon, but don't hold your breath!!
One rule for the politicians 20% pensions benefit hike and another rule for those who are willing to risk life and limb for a 3.2% before-tax pay rise!
It would be nice to think that a clear, unspun message would be issued soon, but don't hold your breath!!
My late father's wife has just been turned down for for part of his RAF pension, for various reasons that I will not go into. One of them was that his pension was "a contributary pension and therefore there were no funds available." It would seem that the RAF pension is a "Non-Contributary" one!
As I understand it the Forces are a special case and will be one of the few professions allowed to take an immediate pension when they retire at 55. However, if you retire early, you will not be entitled to a pension until the age of 65.
Our current pension has reserved rights, therefore we should be all right. But those offered the opportunity to switch to the new pension (in 2007/8?) should look very carefully unless they know they will be staying to 55.
The switch will also possibly entail losing the tax-free gratuity, especially if you retire early. But this last point is very unclear.
Our current pension has reserved rights, therefore we should be all right. But those offered the opportunity to switch to the new pension (in 2007/8?) should look very carefully unless they know they will be staying to 55.
The switch will also possibly entail losing the tax-free gratuity, especially if you retire early. But this last point is very unclear.
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Green Paper etc
RubiC Cube
Having swopped the crewroom for the City I am now working as head of personal pensions in City firm. I am working with a number of individuals to put together a considered response to the Green Paper - to make sure we get what we want in the White Paper. You may know there are actually 3 papers out, all impacting on the future pension situation. There are some major inconsistencies in the current proposal, but there is also a very clear intent by the Government to squeeze those that 'have'. Our take is that this will include the military pension in fairly short order. Probably not in the first White Paper, but the Government's avowed intent is to 'simplify' and to place the onus onto the individual.
I could go on, but doubt anyone is that interested....yet. If you would like to discuss this further, then please email me through this site.
Best wishes
Deneb
Having swopped the crewroom for the City I am now working as head of personal pensions in City firm. I am working with a number of individuals to put together a considered response to the Green Paper - to make sure we get what we want in the White Paper. You may know there are actually 3 papers out, all impacting on the future pension situation. There are some major inconsistencies in the current proposal, but there is also a very clear intent by the Government to squeeze those that 'have'. Our take is that this will include the military pension in fairly short order. Probably not in the first White Paper, but the Government's avowed intent is to 'simplify' and to place the onus onto the individual.
I could go on, but doubt anyone is that interested....yet. If you would like to discuss this further, then please email me through this site.
Best wishes
Deneb
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I too would be very worried about these proposals - were I not already resigning over the army's decision to reclaim FRI 1 & 2 back from me!
I would strongly recommend joining the Forces Pension Society, who are the only real voice for us in these matters. They have some big guns at the very top, and seem to know the right buttons to push. I have recently joined myself, over just these concerns. Have a look at them on www.forpen.co.uk
I would strongly recommend joining the Forces Pension Society, who are the only real voice for us in these matters. They have some big guns at the very top, and seem to know the right buttons to push. I have recently joined myself, over just these concerns. Have a look at them on www.forpen.co.uk
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The letter that the Sqn Ldr from STC sent is big stuff and this thread was way down in the list - has everybody seen it or is old news?
If this A Day (in April 2004) comes about, and I take my option point say in Apr 2006, then any pension contributions made during that time is not paid immedaiately but paid when I am 55 or 65.
The MOD is keeping this one very quiet - they know the consequnces. There will be hundreds of us leaving - nobody in their right mind is going to stay as we stand to lose thousands of pounds.
PMA needs to wake up and start communicating - but its shhhhhh time, nobody needs to know by the looks of it as it is not really important!
But as somebody said - the glossy brochure about pensions said we will have reserved rights or something like that. I am not convinced that all is well.
If this A Day (in April 2004) comes about, and I take my option point say in Apr 2006, then any pension contributions made during that time is not paid immedaiately but paid when I am 55 or 65.
The MOD is keeping this one very quiet - they know the consequnces. There will be hundreds of us leaving - nobody in their right mind is going to stay as we stand to lose thousands of pounds.
PMA needs to wake up and start communicating - but its shhhhhh time, nobody needs to know by the looks of it as it is not really important!
But as somebody said - the glossy brochure about pensions said we will have reserved rights or something like that. I am not convinced that all is well.