All he said was that he bought a house in Ash Vale, didn't say he lived in it.

Very easy to let a house in the Ash Vale area and still live in MQs in Scotland or where ever.

Not venerable, but able to add a view on the NI debate. You only pay NI on "earnings" and as a pension is not "earnings" then you don't for your pension - simples! Tax is as Willard has explained very nicely.

The Police Pension (similar to ours) Calculator website is also helpful by stating "Pension income is taxed as earned income but there are no national insurance or company pension scheme deductions" - see here Police Benefits | Police Pension Calculators | Income When You Retire

:ok:

In 23 years of service I spent 21 of them at Kinloss - as NCO aircrew (AEOp) on the Nimrod MPA there was almost no chance of being posted anywhere other than Kinloss unless you actively worked to get onto another platform - several escapees to 51 and the SAR world each year, but a mere drop in the ocean compared to the huge number of siggies who moved between the squadrons, OCU and Ops, with double tours on the flying squadrons quite normal.

Even when St Mawgan was flying MPA it was far from easy to get a posting to 42, I'd be amazed to hear that anyone was posted from Kinloss to St Mawgan who hadn't fought long and hard to arrange it themselves.

For a kipper fleet siggie to buy a house up here was far from a silly move - and why the **** would somebody facing an entire career on one airbase buy a house anywhere else? Buy at the other end of the country, rent it out, and live in a quarter? Quite the most stupid idea I've heard yet...buy in Moray, rent it out if you get posted away, meanwhile settle into your own home where you'll likely still be 20 years later makes rather more sense. At least that way there's some likelihood you'll get to live in the place yourself.

The comment about 'Not somewhere about as far as you can get from "real life".' is just crass frankly.

Kev's right.

He bought a house in Ash Vale whilst stationed at Odiham, do the street map thing :rolleyes:

Now imagine the guy stationed at ISK who also bought a house locally and now try to imagine with all that is going on in that part of the world just how ****in easy it is to rent/sell that property and go live in the south where there is work, **** me readers but stupid is as stupid does really is appropriate here :ugh::ugh::ugh:

But what are the chances of the house you buy as a 20 year old "Plastic Sgt" being anywhere big enough for 2+2 young children as a 26-30 years old? Come on, do you really believe that you'll be in the same house for 20 years? In any case, with a 25 year mortgage it would be all but paid off...

More likely to be in the same house in your 40s which you bought it in your 30s - and in your 40s you're past the 22 point and now in receipt of an immediate pension. Under AFPS75 a tax-free lump sum, Special Capital Payment for redundancy and a life long (index linked) pension; unless of course, you're one of those that took the gamble for OTT to AFPS05! :eek:

So I don't see why for Kinloss-ites it is any different to anyone else...

LJ :hmm:

The more I read in here the more I realise some folk have simply lost the bloody plot when it comes to spotting the blindingly obvious

The ISK folk are not alone in being stuck in some remote part of the country where there is minimal employment, where the current global economic situation means they are going to get stuffed in the property market when moving to find work and to get any where close to to their previous wage levels they are really going to have to luck in on the job front.

Net salary on top of pension
 

WW - Thanks from me too. Something was nagging me after I made my post and you identified it. However, given a pension of £25,000, additional gross earnings of £17,475 are still only £13,695 net of 20% tax (£2,550) and NIC (£1,230) before you enter the 40% tax bracket at £42,475.

If my reckoning below is correct, a salary of £40k on top of a pension of £25,000 will only gain you an additional £23.5k after paying tax and NIC.I did the same sums for a salary of £50k to see if the results were consistent:I'm no expert so please feel free to check my sums. Income tax calculator here. NIC calculator here.

If I'm right, even a salary of £50k will only be worth £29k in your pocket before taking into account all the usual expenses associated with working. It might allow you to maintain your lifestyle but it could be a severe comedown in terms of take-home pay for a full-time job, probably with less paid leave than you've been used to. This is why you shouldn't yield to employers who try to palm you off with less because "you're already on a pension".

Sffp

Your FS would get £34k tax free SCP, with a tax free gratuity of £36k - making £70k tax free lump sum PLUS a £12k per year pension (£965 per month take home).

Now according to Zoopla the average property price in IV36 is £160k, which after a 10% deposit is £144k -a mortgage for that at 5% is about £840 per month over 25 years.

So the FS could pay off £70k of the mortgage and then reduce the sum to about £430 a month leaving £435 a month to pay everything else. Or pay the mortgage and get £125 change out of the pension and then draw a further £2k per month spending money (tax free) for the next 3 years whilst trying to find a job. Oh, and they could probably use their ELCAS to pay £2,000 per year of tuition fees to retrain over the 3 years.

Come off it pal, that's a ferkin' good deal by anyone's standards who's worked in civvy street.

Daft moi? You must be mistaken...

LJ :cool:

FODPlod

Looking at your numbers for retirement pension then I'm guessing that's for an OF-4. So £25k is about the 23 year point and an OF-4 would be on about £70k at that point. So if one got a £50k job after redundancy, then it would still be better than staying in - £75k before tax but with reduced NI of about £100 per month. Plus you'd have £75k tax free in the bank. But the wise man commutes and that would be £110k tax free and about £70k per year. Plus an OF-4's 9 months pay would take the lump sum to a whopping £160k tax free on redundancy.

Again, I don't see your point either - or am I really that daft as Sffp would have me believe?

LJ

Willard Whyte

The current situation with NI contributions for the State Pension is that Men born on or after 6 April 1945 require 30 Qualifying years of contributions for the State Old Age Pension .

Women born on or after 6 April 1950 require 30 Qualifying years.

These statements assume that the information provided by HMG is correct!!

And you only pay 40% on the portion above the high rate tax threshold

LJ,

So your plan is to buy a cheap property, there is a very good reason why the property is cheap in that part of the world but I guess you know that.

So buy a cheap property and then spend 3 years spending your nest egg whilst looking for a job in an area where the market is awash with unemployed folk all in a similar position due to closures and redundancies :confused:

Net salary on top of pension
 

My point is that a salary of £50k might well 'gross up' your total income to £75k but if you are still paying Class 'A' NI contributions (£365.09 pcm = £4,381 pa) towards the 30 years of contributions required for a full state pension, you will only benefit £29k on top of your net pension after tax and NIC. If you didn't have a pension, your £50k salary would net you a more respectable £35.5k after tax and NIC. The critical factor is that your pension is already putting you that much closer to the 40% tax threshold before you start earning a penny.

The 'penalty' associated with having a pension is even more apparent with lower salaries. If you lack transferable skills or are in an area with few job opportunities, you may have to settle for a salary of, say, £25k for a 46-week year but you will see little more than £16k benefit on top of your net pension after tax and NIC. If you didn't have a pension, your £25k salary would net you a more respectable £19.5k after tax and NIC. As with any job, you will probably have to pay out for commuting, extra vehicle wear and tear, unsubsidised meals, two-line whip social events, collections, suitable clothing, etc.

All I am saying is beware of settling for less because "you are on a pension." You won't see as much of your salary as you might imagine and no one likes working for peanuts unless it's a labour of love.

Fod,

And that presupposes in an area of recent closure and redundancies there are any 25k jobs going :(

I suppose that there was never any realistic possibility of SFFP going quietly.

Dear oh dear Caz, you really do have it bad eh:p

As long as I am still in I qualify to post here, you on the other hand as a civvy..................:confused:

PS. Any comment on the Mull outcome :ok:

Seldom
 

I find your attitude to others on this forum rather interesting, you opinions have received comment from people who are both in and out of the forces.

You seem to want to find a way of getting rid of anyone who has an opinion that is not in line with yours, I got both barrels of a particularly rude, offensive and untrue rant. Now you return to the line that if you are not in the military you should not post on this forum.

I would think that the most valuable posts on this thread would have been from civilians who had recently left the military, they are the people who know the pitfalls leaving the military.

Your attitude of censorship (if you had your way) would deprive the readership of this forum from useful advice and opinion from those who have gone before and encourage a blinkered view of victimization in those who are about to be made redundant.

There is no doubt that people are moving into civilian life at a tough time but this with skills will find work, after all they leave the forces with a good redundancy deal, it is only those who fail to adapt and adopt a narrow view who will fail to make a living.

SFFP,

I started this thread in order to commiserate with those that didn't get what they wanted, to congratulate those that did, to express surprise at some of the decisions made and for good advice to be passed by well-wishers.

I did NOT start this thread so that people like you could turn it into a personal attack against other PPRuNe members.

Some of the points you raise are valid, but your personal comments about others that disagree with you are unwarranted - please desist!

MFC

A serious question to those that volunteered and have received their notification packs:

Q. Is it stated anywhere that you are not entitled to take advantage of Resettlement Commutation if you volunteered and were selected?

If not, I smell a mistake...

G:ok:

If you think bluntness is rude then it's probably as well you never joined any of the services as calling it as you see it is a daily way of life for those in uniform and it's never done me a days harm in well over 30 years :ok:

gijoe,

All those that received 'letters' on Thursday are being made compulsory redundant; albeit some (just under half) were applicants. I may be wrong, but I think that the timescale to depart is the 'only' thing different.

Duncs:ok:

Duncs,

Thanks for that - I think this is a typo. Volunteer or no volunteer I can't see how that affects ones entitlement to commute?

The SPVA, bless 'em, are saying that this is a single service issue and all queries about pensions must be directed to the single service.......

G:ok:

A few other points worth NB'ing:

If you set yourself up as a self-employed consultant, don't forget to put some money into a savings account to pay your tax bill! When you do your first self declaration after leaving the mob, HMRC will bill you for your untaxed income and will also require money in advance for the following year's assessed income. Fine and dandy if you've planned ahead for that, but it can really bite your arse if you haven't!

If your consultancy work doesn't provide a regular income, you could have a good year followed by a bad year - but you will have been pre-assessed for the bad year in advance. Yes, it will all sort itself out in the end, but you could find your pension being taxed at 40%, investment income (if only...) being taxed at the high rate - and yet little income from work. So whatever you do, do NOT commit all your dosh. Keep a prudent combat reserve!

Earn too much and you might find yourself hitting the VAT trigger. While you might wish to register for VAT at a lower income figure, it is mandatory if you hit the trigger value. You WILL need an accountant if that happens.....

Having had some good, some excellent and some lean years, I can assure you that a 'high' income is not always a good thing if you want an easy life. Also, never, never try to be clever with HMRC. They are basically good chaps who will help wherever they can - but lie to them and flag up an attention-getter on their system and you could be the subject of close scrutiny thereafter. There are loads of things which are genuinely allowable against tax, but don't push your luck!

Another tip is to join BUPA while still in the mob. That way you join on a lower rate which continues after you leave. Why join BUPA? Well, your work might depend on your availability and having to wait on an NHS waiting list could seriously damage your work opportunities.

Don't forget dental cover either. Attempting to get on an NHS fang-farrier's list can be almost impossible, so go for Denplan or similar. Private gnasher-bashers have all the latest toys, so for a few quid a month you can have a truly painless service.

Apologies if I've wittered on for longer than that superannuated S1 box-chucker might wish, but when you're no longer on PAYE you really need to be prepared.

Seldom
 

Blunt I have no trouble with, what I don't hold with is rude & abusive.

Your comments in my direction have you with both feet the wrong side of the line and just undermine the point that you are trying to make.

I am sure that if you were in the next hanger down the line and there was a chance that some time in the future I could be doing a check ride on you would act in this way. However as you seem to be a crewman with no ambition to move to the front of the aircraft it is unlikely that we will cross paths.

A C,

Not clever enough for a front seat, worked that out and fully accepted that years ago :ok:

Thanks Beags my day is now complete :p

A & C
 

Having observed this rubbish for several days, I think you have thrown as many stones as any other here, and frankly a little more sensitivity to fellow aviators who have been made redundant wouldn't go amiss.

Isn't there a playground in JetBlast where you, Caz and SFFP can go and beat each other up?

"Disgusted of Lincoln"

Camelspyyder
 

I have been I may have been a little blunt with some on this forum who think that they are getting a raw deal, redundancy is never good but when the big picture is viewed the deal that has been offered to those leaving the forces is far better that anything I have ever seen in civil aviation.

As for the sensitivity bit , I take the more practical view and have waved my fees for flying with those who have been made redundant and are trying to get civilian licences.

FODPlod

I now get what you're saying - thanks. But at the end of the day if you earn £75k up front or £50k plus £25k pension you'll still be paying similar amounts of tax (save for NI).

LJ

FINANCIAL PLANNING
 

Beagle,

an excellent, no-nonsense post. I have been in the Services most of my working life and having supervised different contracts over the years, I remain astounded how naive service personnel are about businees in general and 'simple' tax matters in particular. I was fortunate (although it didn't seem so at the time) to be involved in my parents engineering firm in my teens (albeit at Varsity) until I eventually took the Queen's Shilling. This gave me a basic understanding of business practices and basic tax rules (eg usual ability to claim for expenses necessary to go about one's business). As I have posted before, HMRC can be particularly helpful and pragmatic; however if one tries to be too clever, they'll take one to the clearners, and go back to in one's records to the days of £sd, should they wish to.

Your salient points on self-employment and self-assessment are pertinent to several people I know who have left in recent years and set themselves up as consultants, spending up large without considering the enormous bite that HMRC can - and rightly do - deliver. One chap (PA Flt Lt), whom I suspect you crossed paths with over the years, has fled to France in an effort to avoid the tax man.

Luckily, I don't need to worry about declaring income form investments...like most people here!

...redundancy is never good but when the big picture is viewed the deal that has been offered to those leaving the forces is far better that anything I have ever seen in civil aviation.

AandC,

I don't think anyone who has received the letter this week will argue with you. It is, in the round, generous.

G:ok:

Rather than comparing the financial package to someone in civilian life which is really rather irrelevant why not dwell a while on the gross unfairness of the selection process.

Aircrew mates who have been decidedly average over the years luck in by being combat ready on a type currently supporting ops whilst some good guys in T&E, training or awaiting their replacement type to come on line are heartlessly binned as providing no useful service to the future of the RAF.

This may be despite 20-30 years service, giving their best to the RAF and doing everything that was asked whilst making key choices like; whether to join AFPS 05, buy a house in the local area, compromise a spouses career etc etc due not unrealistically to an expectation of service until 55 years of age.

Consultancy
 

BEAGS WURH et al. Last week I spent some time with an accountant discussing the best way of setting oneself up in business - as a defence conultant. His best advice was as a Limited Company; 100 "shares", divided up amongst the great and good i.e family - so in my case 25 each for me, 2 sons and mem sahib. Don't draw a salary but leave money (clearly after expenses) in the company but pay a dividend at regular intervals (i.e 12 months) (I have since come across someone who pays his "shareholders" a monthly dividend with no adverse repercussions from HM C and R). Apparently the tax burden on such dividens is 20% - clearly you need to take into account tax thresholds incurred by pensions etc and distribute the filthy lucre accordingly. This is the giste of it and obviously take professional advice wrt your own circumstances but it could be the way forward for those interested. CB

PFMG,

Couldn't agree more with your post. The way the selection was handled is confusing to say the least especially when you look at some of those who are staying and some of those who are going?? Don't get me wrong, there are good guys/gals on both sides, but when you have a system that rewards mediocrity just for being in the right place at the right time then its time to go. Kinloss took an absolute pasting compared to some stations I could mention and as has already been said elsewhere in these forums, the RAF/MoD will not realise what they've lost until its too late!

I know plenty at ISK that got their marching orders who would have thrived in any post in places like Waddo, Northwood etc. That said, the fact that they are 'clever' people, many could see the writing on the wall and in the main are happy to be going - perhaps not in the circumstances or manner in which they are going, but still happy to be going nonetheless.

As for what's left when the dust settles - as I said some good, some bad, some average but all the very best to them - they are going to need it!

Personally, I'm happy to be getting out now. Is the grass greener, that I don't know yet but I'm pretty sure I won't regret the decisions I've made.

From an occasional observer I echo the original thrust of the tread and wish good luck to all those involved (this time around) whether or not from choice. Serious commiserations for the apparent injustice and lack of logic involving some of the non-volunteers. Been out 5 years now and tried to reinvent myself outside aviation after 10 years on Kipper fleet and 25 years on AT/AAR in various guises, it’s not easy but potentially more sustainable in the long run. In these times, employers want a full day’s work (and more) for what would seem a small return. You may be surprised to learn how good you really are in the job market and how much your background and training gives you greater value to potential employers. Don’t sell yourself short but be prepared to start low and move up on your own merits. I feel you deserve better but it’s not like that so best of luck to you all whether you are on your way now or later.

camelspyyder

May I Inquire exactly when you became a Moderator?

Caz
 

Not a Mod (prefer rock and proper bikes to be honest) - In fact I'm just another occasionally pompous windbag on pprune:ok:

I am though a member of the aircrew trade that got the biggest kicking in tranche 1 and I have waited since October last year and the MRA4 cancellation under threat of the chop myself.

I may just a little too sensitive about this issue.

CS

I've heard that Tranche 2 numbers & trades etc will be released in Jan 12, anyone heard anything?

As I will move into the frame for the big R, can anyone confirm exactly how you get an official forecast on the payout? ( A forecast that allows you to plan, and is accountable)

I have contacted SPVA #7 - 'you need to speak with your HR Redundancy Focal Point'. Focal Point not really interested and refers to the online calculator and the Armed Forces Pension Society. However, the calculator states that it is not the definitive! So who is responsible for giving me an accurate payout figure, if I am made redundant? I'm afraid I can't leave it to chance as the Black and Yellow is calling..........

AMP briefing team dishing out the Jan 12 line also....

That is a very good question as to how you can get an accurate forecast of what you might get should you be made redundant. I have already been made redundant and am struggling get a forecast that gives me a figure that I can calculate myself.

This because the forecast is based on Final Relevent Earnings:

Inflation adjustments in determining final relevant earnings

7.—(1) For the purpose of determining a person’s final relevant earnings under article 6, the amount of relevant earnings, as determined in accordance with article 6, for that part of the period of 365 days that falls 365 days or more before the last day of service is adjusted for inflation.

(2) If the member’s final relevant earnings are determined in accordance with paragraph (1) to be an amount for any period in relation to which any adjustment for inflation has been made under this article, then, except as provided in article 11(2) and (3), the member’s final relevant earnings are to be taken for all purposes to be the amount so determined after that adjustment.

(3) The reference in paragraph (1) to adjusting for inflation the amount of relevant earnings for part of a period is a reference to increasing it by the same amount as that by which an annual pension of an amount equal to those earnings would have been increased under the Pensions (Increase) Act 1971(a) on the day following the last day of relevant service if the pension—
(a) were eligible to be so increased, and
(b) had come into payment on the day following the last day of that period.

My figure I received in my redundancy notification appears to be based on the pay I received from 1 Apr 10 to 31 Mar 11 increased by CPI of 3.1%. Given that CPI has just been announced as 5.2% (the figure that will be used for pension purposes in FY12/13), my exit date is 31 Aug 12 and that I received a PA Increment on 25 Mar 11, I believe the way SPVA has calculated my FRE is incorrect. I suspect I will end up going via the Forces Pension Society to check my figures and if need be do battle with SPVA.

Word is that the online redundancy calculator is pretty damn accurate, more so than than the written statement that came with the sacking letter. T'was what I was told anyway.

MoD Redundancy Calculator