Service Pension Reduction

[orionsbelt]

I reached the magic age of 65 a couple of weeks ago and today was the first payment of my state pension.
However I have also received a letter from the Xafinity Paymaster telling me my service pension is being reduced under national insurance modification rules. In my case a reduction of about 5.5%.

Xafinity Paymaster state that the reason is because between 1948 and 1980 Service personnel did not pay the correct NI Contributions.

Any body know anything about this?

[BBadanov]

WOW. This seems incredible that retrospective action on your pension can occur. Very meanminded by UK HMG. I am a realist, but didn't think this could happen.

[HTB]

Extract from the 2011 AFPS Newsletter below.

The last 2 paragraphs might be relevant; could be you have not been informed of any dual payment or recovery of same. If this is not the case, there is something a bit more disturbing going on for those of advanced years (I'm only 4 behind you, so will stay alert on this topic).

The Social Security Pensions Act 1975 introduced the State Earnings Related Pensions Scheme(SERPS). The AFPS contracted out from this scheme but, by law, had to pay a pension benefit atleast as good as that paid out by SERPS. This amount is known as your GMP.

Her Majesty’s Revenue & Customs (HMRC) National Insurance Contributions Office (NICO) advise XP how much of your pension the GMP amount forms at State Pension Age (SPA). Please note that this is not an additional amount to be paid, as it forms part of your existing pension.

Men can currently claim their State benefits at age 65. From April 2010 SPA for women began to increase from 60 and from April 2016 the pace of SPA equalisation increases. Women’s SPA will therefore reach 65 in November 2018, and from December 2018 SPA for both men and women will start to increase to reach 66 by April 2020.

When you claim your State retirement benefits the Pensions Service, which is part of the Department for Work and Pensions (DWP), is responsible for paying part of any annual pension increase on your GMP with your State benefits. This addition will be shown on your annual pension statement received from The Pensions Service, who may refer to GMP as Contracted Out
Deductions (COD). XP must allow for this when calculating any increase on your pension to avoid you receiving an increase on the same amount of GMP twice.

Therefore although women’s GMP payment age will remain at 60 the AFPS must fully inflation proof their GMP to SPA, and adjust their annual rate of AFPS pension to exclude the GMP increases paid by the state from SPA.
GMP may be in two parts, for the period 5 April 1978 to the date you left the Armed Forces (or 5 April 1988 whichever is the earlier) and for the period 6 April 1988 until you left the service (or 5 April 1997 whichever is the earlier). XP will apply any increase to the part of your GMP that was earned after 5 April 1988 and pay this with your Armed Forces Pension, but only up to a maximum of 3%. Any increase above 3% and all of any increase on the GMP amount earned before 6 April 1988 is paid by DWP with your state benefits. However, a further change in the law (Pensions Act 1995) means that XP will pay any increase in full on all the benefits earned after 5 April 1997.

Unfortunately, on occasions HMRC NICO does not advise XP of the value of your GMP in time. If this happens it may mean that you receive an increase on your GMP with your Armed Forces Pension and your State Pension, which in turn will result in you being slightly overpaid. XP will have to adjust your pension payments later to take this into account. You will, of course, be notified in advance of this happening.

Mr B

[ian16th]

I have also received a letter from the Xafinity Paymaster telling me my service pension is being reduced under national insurance modification rules.

Surely National Insurance only effects State Pension?

[cazatou]

As someone who reaches State Retirement Age in approximately 32 hours one has to query why it has taken some 32 Years for this problem to come to light.

Moreover, "National Insurance" is a deduction from income decided by HMG over which the Payee has no control. This money was not withheld by the Payee, it was failure to collect the money by the Government Agency whose duty it was to do so.

This does not surprise me as I recently received a letter from the Pensions Agency in respect of my State Pension which detailed 5 different Schemes that I had been in (and which I knew nothing about) - one of these Schemes will provide me with an extra 1 Penny a week (before Tax).

[The Old Fat One]

one of these Schemes will provide me with an extra 1 Penny a week (before Tax).

My begging letter is in the post :ok:

[airpolice]

Caz,


Every week?

[Dengue_Dude]

Therefore although women’s GMP payment age will remain at 60 the AFPS must fully inflation proof their GMP to SPA, and adjust their annual rate of AFPS pension to exclude the GMP increases paid by the state from SPA.
GMP may be in two parts, for the period 5 April 1978 to the date you left the Armed Forces (or 5 April 1988 whichever is the earlier) and for the period 6 April 1988 until you left the service (or 5 April 1997 whichever is the earlier). XP will apply any increase to the part of your GMP that was earned after 5 April 1988 and pay this with your Armed Forces Pension, but only up to a maximum of 3%. Any increase above 3% and all of any increase on the GMP amount earned before 6 April 1988 is paid by DWP with your state benefits. However, a further change in the law (Pensions Act 1995) means that XP will pay any increase in full on all the benefits earned after 5 April 1997.

Aah, now I understand . . . I'm really glad someone sorted it out and gave us the simple version. Makes perfect sense now . . . (in a pig's ear).

No wonder there are so many people that don't receive all their benefits (even the one's they've earned).

[sharpend]

When I reached 65 last year and my state pension started, my service pension was reduced. This was because the state pension is not taxed and the tax is taken from my service pension.

[orionsbelt]

http://www.communities.gov.uk/documents/fire/pdf/129119.pdf

Please take a look at the above link, , I think the same will apply to ALL of us.

There has been some discussion On the Navy forum re this same issue.

There is more Google data to search through.

This is nothing to do with income tax that is already take off my personel pension. and amount to an extra tax bill of £88 pm for the OAP.

This modification amount to around £15 per month, which over 25 years is £4500+ increase ellements

***

[cazatou]

TOFO

As you are OLD I will send you an OLD Penny- when I have saved that amount. Of course I will have to send you a bill to cover International Postage/ Envelope and Insurance.

[embo]

I also just received my letter from xafinity. My reduction amounts to £244.29p an 8.15% reduction.
It appears that all Public sector pensions are subject to this rule; however most are restricted to a much lower reduction, a teachers pension, for instance, is restricted to £1.70 per annum for each year of service, to a maximum of £54 per annum, other public service pensions are to a maximum of £67.75 (pension manual).
I shall certainly be speaking to my MP about this.

[newt]

Suely this is something for Veterans -UK to be looking at? There is no mention on their website but they do have a helpline which might be worth a buz!!

[radar101]

The GMP rules have been around for a long time. The Paymaster newsletter has talked about it for at least the last 10 years so it should come as no surprise.

The Forces Pension Society try to explain it as well:


What is a GMP?
A GMP is the minimum pension which an occupational scheme such as the Armed Forces Pension Scheme (AFPS) must provide as one of the conditions of contracting out. The AFPS is contracted out of the Second State pension, previously known as State Earnings Related Pension Scheme (SERPS). If you or your deceased spouse were employed in the Services and a member of AFPS 75 between 6 April 1978 and 5 April 1997 you will have earned a GMP. GMP is not a separate benefit paid in addition to your AFPS pension but the pension we pay you must equal or exceed the GMP.
HM Revenue and Customs work out the level of your GMP. Your GMP comes into force normally when you ask for your State pension to be paid to you. (There are circumstances when the GMP comes into force at a later date but the effect on your AFPS pension is the same).
What is pensions increase?
The Pensions (Increase) Act 1971 governs the cost of living increases that apply to public service pensions. Xafinity Paymaster is the organisation that pays your pension under contract to the SPVA, who are the AFPS Administrators. Xafinity Paymaster increases your pension each year to reflect rises in the cost of living as centrally directed. The annual increase in public service pension is the same percentage as that applied to additional State retirement pensions and other Social Security benefits.
How is the pensions increase applied to my GMP?


Xafinity Paymaster applies the pension increase to the whole of your AFPS pension, including the GMP element, until your GMP comes into force. At this point your AFPS pension is paid as follows:

For service up to 5 April 1988 - The Government will pay the pensions increase relating to the GMP you earned up to this date with your State pension.
for service between 6 April 1988 and 5 April 1997 - Xafinity Paymaster will pay increases on the GMP you earned in this period up to 3%. In years when the increase is more than 3% the Government will pay the balance with your State pension.
What effect does this have on the pension you pay me?
When your GMP comes into force the National Insurance Contribution Office (NICO) tell Xafinity Paymaster the amount of your GMP. Paymaster then adjust their records to reflect the fact that the Government now pays some of the annual pensions increase on the GMP element of your Armed Forces pension with your State pension. The overall increase in your pension will however be the same.



I haven't reached 65 yet but my teacher wife has a COD/GMP of £38.65 per week on her State Pension.

From reading the various documents I think the shock comes when, having been paid your RAF pension for some years, the State Pension kicks in and the increase in the GMP bit of all those years of RAF Pension payments gets revalued because it will be paid as part of your State Pension.

Not exactly straighforward!

[Pontius Navigator]

Worry not, there will be worse to come I am sure.

At the age of 65 you get an increased personal allowance of £9940 against £7475. However if you earn over £24k you lose one pound of allowance for every £2 above £24k. This gives you a marginal tax rate of 30%.

[orionsbelt]

Chaps I attach a scan of the reply from my MP and the MOD.

Following on from that I show how they have calculated my reduction.

This will effect all of you who served during the stated period.
Additionally please note my calculations as this is a living reduction and is recalculated each year, so if you have a pay increase this reduction is also increased!!!!!!!!

*********************

MINISTRY OF DEFENCE
FLOOR 5 ZONE B MAIN BUILDING
WHITEHALL LONDON SW1A 2HB
Telephone: 020 7218 9000 (Switchboard)

THE RT HON ANDREW ROBATHAN MP
MINISTER FOR DEFENCE PERSONNEL WELFARE AND VETERANS
Our ref: xxxxxxxxxxxxxxxx 11 August 2011

Thank you for your recent letter, signed by a member of your staff, enclosing correspondence from your constituent, Mr xxxxx xxxxxx xxxxxxxx xxxxxxxxx xxxxxx, about the reduction in his Armed Forces Pension under the National Insurance Modification rules.


The reason for the abatement to Mr xxxxxxxx pension goes back to 1948 when the National Insurance (NI) Scheme was made compulsory for all employed personnel.

When flat rate benefits were introduced, the Government took the view that, to avoid over-provision of pension benefits, account should be taken of other benefits payable at the State Retirement Age (SRA).

All employers with occupational pension schemes were required to modify their schemes to take account of the contributions and benefits payable under the NI Scheme.

As a result, on reaching SRA, the Armed Forces Pension Scheme (AFPS) pension of Service personnel who enlisted on or after 1 July 1949 is reduced by £0.8708 per annum for each complete year of reckonable Service between 30 June 1949 and 1 April 1980. This reduction is referred to as the NI Modification rules.

In addition pensioners, like. Mr xxxxxxx, who also contributed to the Graduated Pension Scheme (GPS) whilst in the Service during the period 3 April 1961 to 5 April 1975, have their Armed. Forces pension reduced by the amount of the basic graduated pension (also payable at SRA as State benefits) earned by their graduated contributions. This reduction is known as a GPS abatement.

Officials have confirmed that Mr xxxxxx AFPS pension has been correctly reduced in line with the rules governing both the NI and GPS Schemes at the time of his Service. I can assure both you and Mr xxxxxxx that the reductions applied are not as consequence of him having paid insufficient NI contributions during his Armed Forces Service. However, it is also the case that the State pension Mr xxxxxx has been receiving since attaining SRA on 10 July 2011 will have been enhanced by the contributions he made to the NI and GP Schemes.

************

I hope this reply is helpful and explains the position

Now for calcs on My reduction.

I have 12years service that counts so 12 * 0.8708 = £10.44
Also I have a figure of £24.70 for GPS so combined that is £35.44

However now comes the big RUB that £35.44 is indexed at a set rate of 5.2582% for every year since I left in 1976,. So in my case that is 35 years compound and comes to around £214 pa for Tax year 2011/12.
Additionally that will be further indexed for each future year I.e. the figure is revised annually.

This is nothing to do with Tax code changes or anything else

So there you go, as a matter if Interest I have 45+years NI contributions
with most of them at the highest rates. And years as a higher rate income Tax payer. No words can explain My thoughts on this, It just stinks!!!!!
I will not talk about the other tax chages as I get stung by them as well. I saved up for my old age!!!!!!
It really sums up the attitude of the Gov (any of then ) wrt service personel. I think we should listen to the TUC ????????

Have fun
***

[newt]

STUFFED again Boys!! And there we were, thinking we were doing a good job defending the Nation and all the while the beanstealers were having their wicked way!

Well stuff them all!! Sell the house and downsize to something less than 300k and spend the rest on wine women and song!! Otherwise they will have the lot!!

See you all down the pub!!:ugh:

[Dengue_Dude]

As ever, those who are responsible citizens and made provision for their retirement are shafted.

Irresponsible gob****es and oxygen thieves blissfully go through their lives taking everything, the billions paid out in a myriad of incoherent allowances.

So glad we live in parliamentary 'democracy' where true endeavour is rewarded.

Rant over, have fun

[Benzimra]

"All employers with occupational pension schemes were required to modify their schemes to take account of the contributions and benefits payable under the NI Scheme."

These regulations apply to all pensions. I took early retirement at age 60 from my civvy job. At age 65, when I received my state pension, my occupational pension went down by the amount stipulated by the regulations. C'est las vie.

[orionsbelt]

So it applies it to all pensions?? how come this is the first time I and many other have learnt about his. Its not stated in any Pension Planning Documents or NI.gov webpages. Its not stated on my AFPS75 Doc (what little I have). Age UK know nothing about it, so why is it kept so hush hush?????

The first I hear about it is when XP cut the cash.

***

Edited to remove the Rant!

[cazatou]

I wonder if all this applies to MP's Pensions? Did anybody read the really small print?

[radar101]

So if its Ok then if they apply to all pensions, how come this is the fist time I and many other have learnt about his. Its not stated in any Pension Planning Documents. Its not stated on my AFPS75 Doc (what little I have).
Age UK know nothing about it, so why is it kept so hush hush?????.
The first I hear about it is when XP cut the cash.


It has been in the Paymaster newsletter that you get yearly for at least the last 10 years

[cazatou]

radar 101

What Paymaster newsletter that is sent every year?

[radar101]

What Paymaster newsletter that is sent every year?


Apologies Caz I mean the "SP&VA AFPS Newsletter" - I always think of it as originating from the Paymaster.

[cazatou]

radar 101

Thanks for that - there is always a possibility of postage being misdirected to Overseas Locations.

[Dengue_Dude]

I mean the "SP&VA AFPS Newsletter" - I always think of it as originating from the Paymaster.

Catchy little title isn't it?

[orionsbelt]

Hi Radar 101
Thank you for:-

'It has been in the Paymaster newsletter that you get yearly for at least the last 10 years.'

I have the 2010 and 2011 newsletters in front of me, can you please direct me to the section that refers to 'NI Modification Rules' that relates to people who served before 5/4 1978. I retired in 1976. I can see the GMP section but that only refers to service since 5/4/1978
Either I'm blind, thick and stupid or all three but I cant find any mention of 'NI Modification Rules'.
Appreciate your direction.
Thank you
***

[xtp]

Come next April those newly drawing pensions will discover another subtlety of the system.

The first annual pension increase is factored by the time between retirement date and the day of the increase, so those who retire later in the financial year get a smaller pension the following year (and every year thereafter) than those who retire earlier in the year. This despite a nominal pension revision once a year to take up inflation, which builds up over the year, but the later you retire in the year the less the first increase accounts for inflation. When I queried this, I was told it was due to an announcement in parliament by Maggie and that there was no way out of it.

And if they are still staging pay rises like they were in the year when I retired, those who retire before the 2nd stage only get the stage 1 pension.

In my case this amounted to an initial reduction of several hundred pounds a year compared to the full award.

[Capt Niff Naff]

xtp,
Have you done the maths, or do you know which is the best date in the year to retire on in order to maximise the pension?
It may be of interest to anyone who wishes to 'dictate to management' (replace with 3 letter acronym) the day on which they hang up their bag of loyalty pills.
CNN :ok:

[cazatou]

They have to find the money for MP's and Lords perks from somewhere!!:mad:

[Al R]

You want to see subtlety? It took me weeks to summon up the courage to get my head around this little AFPS gem..

http://www.legislation.gov.uk/uksi/2011/1364/pdfs/uksi_20111364_en.pdf

Ok, here's the easy version!!

http://www.legislation.gov.uk/uksi/2011/1364/pdfs/uksiem_20111364_en.pdf

[cazatou]

Al R

It seems perfectly reasonable to me as it complies with Standard Government Policy in respect of matters such as this:-

"Complicate where possible - Confuse where not."

[xtp]

If the pension increase is not staged, then those whose birthday/retirement date is soon after 6 April will get the maximum increase the following April.

I have not done the sums to see if the loss of pension from retiring early is offset by that extra increase, but somehow I doubt it will be.

If the pension increase is staged, then most likely the best date will slip from the April date to immediately after the stage increase given that the staged increase more than offsets the loss due to the time calculation.

In my case I lost out twice because my obligatory retirement date was just before the staged increase to complete the year's pay award. I would definitely not recommend being caught like that if you can avoid it.

[Chugalug2]

Al R:
Ok, here's the easy version!!
Easy version? We don't need no stinkin easy version! Everything here is in perfectly good order, boys and girls. Nothing happening here, we've all got homes to go to. Come along now Ladies and Gentlemen, move along please!
As Benzimra says, this applies to all UK Occupational Pension Schemes, you hit SRA and the good news is that the Government are paying back a little of what they've taken off you all your working life. The bad news is that your Employer's Pension takes a hit as so clearly and lucidly described in Al's link. Simples!
Hope all is well, Al, old bean. Good to see Mr Gibb's dream coming true at last!

[Lima Juliet]

Al R

The links appear to be AFPS 05 only?

LJ

[Shack37]

As someone who served from 1960 to 1971 whose service pension entitlement is £0.0 per annum can anyone give me reassurance that, under the new rules, this will not be recalculated to a negative figure requiring me to set up a DD in favour of the MoD?

[Chugalug2]

Shak37, now why did you have to go and say that? You've got me worried now. 1959-73, Gross Pension £0.00. You don't really think they could do you? I mean, they wouldn't would they? Al? Al? Oh dear, oh dear, oh dear. Oh dear, dear, dear......

[Not Long Here]

One way round this issue for those in the colonies is not to take the UK Pension and instead go for your country of residences pension instead.

That way you don't end up with a frozen (non-indexed linked) UK OAP and your military pension abated but have, in my case, NZ Superannuation (increasing) plus my full UK service pension.

Strangely, at current rates, NZ Super is actually more than the UK OAP after tax for me as well :)

[sisemen]

I'm not sure that works in Oz. I think that if you have entitlement to a UK OAP then that should be accessed and can only be topped up by the Oz pension if it gets to a stage where you become bereft of funds because of the freezing rules. Additionally, I think that the receipt of an Armed Forces Pension puts you outside the means tested figures for an Oz pension.

Somebody please tell me I'm wrong.

[Not Long Here]

In NZ anyway the Super is not means tested and I have a choice on which to access - UK or NZ as I will be qualified for both. UK from NI payments and NZ from time in the country

[fergineer]

Not Long..... As I work it, you have to first get your UK pension paid here then if that falls short of the Kiwi pension the govt here make it up to what you would get if you only had the UK pension. Its complicated and if you have worked elsewhere and have paid toward their pesion you have to get that paid as well, a friend worked in Canada for a couple of years and they have to get that paid first before she gets her Kiwi pension to top up the amount. If there is a way to get the money back from the UK govt and pay it to the NZ govt I would be interested to hear.

[Not Long Here]

fergineer - google the Special Banking Option at Work and Income

[Shack37]

Shak37, now why did you have to go and say that? You've got me worried now. 1959-73, Gross Pension £0.00. You don't really think they could do you? I mean, they wouldn't would they? Al? Al? Oh dear, oh dear, oh dear. Oh dear, dear, dear......


OMG....:eek: You've got a 12 year+ golden handshake as well. Spend it all quick and declare bankruptcy.

[endplay]

Still don't understand the workings of this but are you better off as a result of getting the state pension or does the reduction to your service pension equal the amount you get from the state?

[LFFC]

This seems to be official MOD statement on this issue:

Guaranteed Minimum Pension (GMP) - Error In Calculation (http://www.mod.uk/DefenceInternet/AboutDefence/CorporatePublications/PersonnelPublications/Pensions/Booklets/GuaranteedMinimumPensiongmpErrorInCalculation.htm)

The Service Personnel and Veterans Agency (SPVA) is sorry to have to inform Veteran Customers that an error has been identified in respect of a small proportion of Armed Forces Pension Scheme 75 (AFPS 75) pension payments. This error is in respect of the application of the Guaranteed Minimum Pension (GMP) element of the pensions of some 6,000 members of AFPS 75.

The error only affects 2% of the AFPS 75 pensioner community. Armed Forces Compensation Scheme (AFCS), AFPS 05 and War Pensions Scheme payments are not affected.

Usually, under Government Accounting rules, SPVA would seek repayment of any amount overpaid in an occupational pension scheme such as AFPS. However, in this case, SPVA are happy to inform you that GMP overpayments relating to this issue will not be recovered.

This error affects pensions administered by a number of government departments. The vast bulk of AFPS monthly payments, some 360,000, are unaffected. The error came to light some months ago and a full audit has since been undertaken to identify the scheme members involved along with the cause and effect. The issue affects pensions paid by a number of government departments including the Ministry of Defence. The process for ensuring that pension records include the necessary National Insurance contribution information has not worked effectively in all cases.

Full details here (http://www.mod.uk/NR/rdonlyres/12546103-F920-435D-A0C7-87CC1ABB0A41/0/GuaranteedMinimumPension.pdf).

[Al R]

endplay,

On the surface of it, yes - you get the State pension in addition to AFPS. But your State pension is deemed to have been taxable income, and it certainly goes towards the annual allowance that you are able to 'earn' each year without paying tax.

The difference is that (currently) your annual allowance at 55 is £7474, at 65 it is £9940 and at 75, it is £10090. The net result is that the older you get, the more you can receive without paying tax. Don't forget, if its best for you, you can defer taking your State pension and get a higher amount.

There are lots of pros and cons in doing that; for some people, it isn't the correct thing to do. Finally, it isn't what you earn.. it isn't even about how much you make, its what you keep.

[olddog]

Whilst your personal tax allowance increases at age 65, if your net annual income exceeds £24000 you lose £1 of tax allowance for every £2 of income until your Tax allowance reduces to the standard £7470. My RAF pension + state pension + income from part time work mean that my tax allowance will remain at the basic £7470!! So much for working for a pension and paying tax and NI for 50 years! If you have a net income of more than £100K - lucky you, the £1 for every 2 rule applies until your tax allowance reaches ZERO!! The £100K rule applies regardless of age.

I am due to receive my state pension next month and enquired of Paymaster what effect this would have on my 2 RAF pensions (I did a stint of FTRS after the age of 55) because of the Minimum state pension rules. To my surprise they had already done the calculations and the result will be a gross reduction of approx £110 pa. For comparison purposes I joined in 1966 and was just short of my 55 point when I transferred to FTRS for a further 5 years service leaving in 2005.

Hope these current facts help someone along the way

[Al R]

Old dog,

Always take proper advice, but you are absolutely (regretably) right. Hence the need to consider at least, a personal pension for the wife/husband/girlfriend/boyfriend/cat/dog. Anything to use up their personal annual tax allowance and not just yours. Its all very well, an alpha male banging flying pay like mad into an AVC (for instance) if he then gets taxed to hell and back on the subsequent larger income in retirement - especially when his wife has not had any pension/savings/investments in her name for the past 30 years or so.

Offshore Bonds too; although investment vehicles and subject to risk offer income which is not classified as income, rather, return of capital (up to 5% of Bond value pa is allowable, free of tax). They used to be the preserve of the very rich - now though, more an invaluable weapon in the relentless fight against George Osborne and the ginger rodent. Offshore Bonds; also potentially very useful for planning for a child's education, as you can allocate a nominee (the young adult in education) segments of the Bond each year, which they can then receive without a tax liability (limits apply) and which can go towards an education/food/housing/weed/beer/pizza etc.

[Melchett01]

Hence the need to consider at least, a personal pension for the wife/husband/girlfriend/boyfriend/cat/dog. Anything to use up their personal annual tax allowance and not just yours

An excellent demonstration of why a balanced portfolio is vital, and not necessarily balanced just across sectors but also across instruments. It's why I am sticking with the AFPS pension and putting what I can into stocks and shares ISAs. Assuming the current rules remain extant going forward, I will hopefully have a pension and source of tax free returns / income which will mitigate some of the rules which give with one hand and take away with the other.

[cazatou]

One could also do as I did and marry a Lady whose income (and therefore Pension) is greater than your own!!

[Capt Niff Naff]

Peeps,
If one could choose the day of the year to retire, and thus maximise future income, is any one day better than another to retire on?
Is it better to leave on 31 Mar, 1 Apr or , say 5 Apr, to tie in with the financial year, or is it better to go on CPI/RPI day?
Any help would be appreciated. As usual I will sift the banter from the fact as I too know that a day out of uniform is a day wasted and, yesterday was always the best day to retire!
CNN
:ok:

[LFFC]

There are a lot of factors to consider and most depend on your personal circumstances. However, here are a couple of important ones:

With a pay freeze in force, your pension will only increase by your yearly pay increment - if you have any left; if not, your pension is frozen as well.
The last time I looked, the yearly increment was about 3% of basic salary (although it varies a bit). As inflation is running at about 4.5%, your pension will be losing value in real terms if you stay in. Anyone who reached their maximum pension scale 18 months ago and remained serving will have suffered nearly a 10% decrease in the real value of their pension by Apr 2013!

However, your pension becomes index-linked from the day you leave the Service. The next pension increase will be applied in Apr next year and will be based on the CPI rate announced next month. If you were to leave the Service today (with 6 months of the FY yet to run) then you would receive a pension increase of half of the CPI figure.

So on the face of it, if you've decide to leave soon, it would be best to get your hands on your pension as soon as you can. However, you might wait for a big pay rise in Apr 2013 (hence a big increase in pension), or you might gamble that inflation will fall below your yearly pay increment of about 3% soon and make it worthwhile staying in. But don't hold your breath..........

[Biggus]

LFFC,


"...With a pay freeze in force, your pension will only increase by your yearly pay increment - if you have any left; if not, your pension is frozen as well...."



That is so wrong that it shows you have a total misunderstanding of how the pension scheme works!!!!


Edited to add an example:

I have no yearly pay increments left, so am on a total pay freeze, yet in the next 12 months the value of my pension will rise by 3.2%! Yes, I'm still loosing out compared to inflation, but by nowhere near the amount you are suggesting.



My advice to anyone considering leaving is to take professional advice on the financial consequences, don't believe what you read on here, get from a man in the pub, etc, etc......

[Seldomfitforpurpose]

LFFC,


"...With a pay freeze in force, your pension will only increase by your yearly pay increment - if you have any left; if not, your pension is frozen as well...."



That is so wrong that it shows you have a total misunderstanding of how the pension scheme works!!!!

I thought the same, my pay is frozen but I have had 1 with 1 more to come PA increment. If I have misunderstood things I would be grateful for some more info please :confused:

[LFFC]

I should perhaps have said, "your yearly pension increment - if you have any left" - sorry if I confused you. Those serving on AFPS 05 will get an annual increment of 1/70th of their salary up to 35 years of service (on PAS, the maximum levels are dependant on your rank/trade). Those serving on AFPS 75 get an annual increment as published in the Pension Code tables up until 34 years of pensionable years of service.

Unless something has changed in the last couple of months, please explain what I've got wrong Biggus.

I agree about getting independant advice, as I said, it all depends on your personal circumstances.

That all said, the Telegraph seems to be running a campaign to take even those pension increases away from you!

When is a pay freeze not a pay freeze? (http://www.telegraph.co.uk/finance/jobs/8748160/When-is-a-pay-freeze-not-a-pay-freeze.html)

[Biggus]

Right then.....

I'm on the PA payscale, and have gone as high as I can. Therefore no more annual increments, and I'm on a pay freeze. However,.....

I have currently served 31 years (ish). So my pension is 31/70ths of my "final salary". A year from now my pension will be 32/70ths of my "final salary". Yes, the final salary in question won't have changed, but the proportion of that final salary that makes up my pension will have gone up - hence my pension has increased in value.

Now, going from 31 years qualifying to 32 means an increase of 32/31 (if it is easier for you to understand compare 32/70ths to 31/70ths as a ratio), which is 1.0322, or 3.2%. The year following that, when I go from 32 to 33 years, it will only be an increase of 3.1%. However, if I was younger, and say going from 25 to 26 qualifying years, that would be a 4% rise.

Hopefully I have explained that sufficiently well that it makes sense...

[LFFC]

I did say "the yearly increment was about 3%" and that things would depend on your own personal circumstances. Sorry for not being accurate enough for you, but yes, you've got the idea.

[Biggus]

My turn to apologise if I got the wrong end of the stick....

The point is, the only people who be seeing the value of their pensions decrease by 10% ish are those that have served 35 years on AFPS05 or 34 years on AFPS 75.

These will be a fairly small and select band, aged 52+ depending on how old they were when they joined up (for example, having joined older than 20 it won't effect me even when I get to 55 and retire).

Loss of pension buying power vs inflation is just one factor this select band will have to consider when deciding on what to do in future, along with job satisfaction, current earnings vs possible salary outside, etc.

However, as I said before it should be a very small group, and won't effect the majority of pprune readers.

[LFFC]

Yes, that's correct.

However, although it's not the original point of this thread, everyone serving should realise that a 2-year pay freeze, whilst inflation is running at 5%, means that the real value of their pay (and resulting pension) will have been reduced 10% by next April.

[Biggus]

Last post, then I'll let it lie.....


Say my pay was £70,000 in Apr 2010. With a pay freeze in place, it will still be £70,000 in Apr 2012. With inflation running at 5%, after the two years £70,000 will buy less, and the "real value" will have decreased by about 10%.

If in Apr 2010 I have served 30 years, my pension would be 30/70ths of my salary, £30,000. In Apr 2012 my pension would be 32/70ths of my salary, £32,000. Hence my pension has gone from £30,000 to £32,000, a 6.6% rise. With inflation running at 10% over those 2 years, the "real value" of my pension has decreased by approx. 3.3%. If I was younger it would have decreased by even less.

A pay freeze means that EVERYONE in the military will see their salary effectively decrease by the value of inflation. By contrast their pension will effectively decrease by an amount that will vary from the total value of inflation, for a small group of older people at the top end of the pension schemes, to virtually nothing for younger individuals who have recently qualified for an immediate pension. However, the value of the pension certainly isn't going up!


Just think what the "value" of pensions would be going up by if there was no pay freeze and inflation was lower! Which is exactly what was happening for the years prior to Apr 10.


At the end of the day the military pension scheme is a bl*#dy good deal!

[Seldomfitforpurpose]

Do any mathematical computation you like but for simple old me the Pension Calculator has not moved in any significant manner since the pay freeze hence my perception that I have actually lost a tidy sum of money as opposed to gained anything.

But have to agree the PA pension is a fabulous sight to behold :ok:

[Sven Sixtoo]

I'm not on commission, honest.

And he hasn't actually done anything for me yet.

But, if you have any flex in your finances to enable you to make decisions (and nearly everyone on here does, I suspect), a chat with Al R will be enlightening and profitable.

Sven

[Al R]

Sven, (cheque's in the post chum, although in respect of profit, the value these days of investments can even occasionally go up as well as down!) - hope you are well and things are evolving nicely for you. I’m still waiting for Greece to default once and for all so I can pick up a beach pad in Protaras for peanuts when certain Cypriot banks implode. You on LinkedIn? In fact, is there anyone on it who would like to exchange details?

Back on topic, if you’ve been commissioned from the ranks, your net accrual and personal pension statement relate to you, not the bloke next to you in the crewroom who might not have been. Reckonable service for AFPS does not begin until 21 for officers and 18 for ORs, regardless of when you join up. So, accrual of a full service pension at age 55 takes 34 years for officers and 37 years for ORs.

Accrual is uneven over a career with higher accrual at the outset, up to IPP. Pension and terminal grant accrue separately - if they accrued together producing a higher base level of pension, (with no terminal grant payable unless the member commutes part of his pension), widow/civil partners’ pensions might rise as they are normally set at half the scheme member’s pension entitlement. There is room, under HMRC limits, for a general increase in AFPS benefits.

Pensions benefits for the scheme member account for 62.5% of pay and half that figure for the widow etc. The Inland Revenue limit is up to 2/3 pay for the scheme member, and up to 4/9 pay for the surviving widow/civil partner/dependent. There would, therefore, be flex within the usual rules governing pensions schemes to increase the level of benefits, although the benefits and affordability of an increase of this sort would be pretty well impossible in today’s economic climate.

In respect of PA spine etc, the fact that flying pay is not pensionable is a bugbear because it is seen as a consistent part of overall remuneration and consequently, a ‘career’ flier’s pension on retirement may be a much lower proportion of final earnings than that of someone within PA spine. However, all Specialist Pay is currently set at a level which take account of its non-pensionable status anyway.

Go here for a more accurate (mostly!) prediction www.mod-abc.co.uk (http://www.mod-abc.co.uk) , but as a quick fag packet calculation (05);

If you were in for 25 years and your final salary was £40,000 your annual pension would be:

£40,000 × 25 × 1/70 = £14,278

If you were in for 10 years and your final salary was £25,000 your annual pension would be:

£25,000 × 10 × 1/70 = £3,571

edit: I saw a client last night who may well be reading this, and I was told of a flightdeck rumour that promotion from here on in would be dependent on transferring from 75 to 05. Any truth in that rumour?!

[Lima Juliet]

Here's another bombshell for those that retired in the past couple of years and took resettlement commutation. From what I read there may have been over payments and underpayments...:eek:

http://www.mod.uk/NR/rdonlyres/7334A8D5-28B5-4D25-8E95-EE473C72C693/0/20110927WEBPAGECHANGEINRESCOMMUTATIONFACTORS.pdf

LJ

[gijoe]

'I saw a client last night who may well be reading this, and I was told of a flightdeck rumour that promotion from here on in would be dependent on transferring from 75 to 05. Any truth in that rumour?!'by Al R

Definitely true that this is a Purple rumour doing the rounds.

If true, there will be more people diving for the doors...which might be the ultimate aim anyway.

:ok:G

[Backwards PLT]

As there appear to be some people here who know what they are talking about, I hope the OP won't mind me stealing the thread to ask a couple of questions on pensions. Clearly I won't base my entire future life on the answers, will consult a professional etc, etc.....

According to the on-line pensions calculator, if I leave at 55 as a Sqn Ldr (probable worst case) I will get a lump sum and about £26k pa. So:

1. Will I get the state pension (about £5k pa) in addition to this (presumably at state retirement age)?

2. Will my wife get the state pension as well, assuming she has 30 years of NI contributions?

3. If she has, say, 22 years of NI contributions will she get 22/30 of the state pension?

4. Does this change if I live overseas (in the EU)?

5. If I top this up with an annuity, or some other investment, will I pay UK tax on that or overseas?

6. Will the service pensions people answer these types of questions?

Obviously I know things might change soon with service pensions.

Thanks.

[Al R]

Backwards,

Currently, every serviceman will get the Basic State Pension (BSP) in addition to AFPS, assuming he/she has contributed sufficient (currently, 30 years) National Insurance Contributions (NIC).

Qualifying for a basic State Pension : Directgov - Pensions and retirement planning (http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/Basicstatepension/DG_10014671)

Yes, your wife will also get an independent BSP if she has contributed enough, or spent years away from work raising a family. If she does not have sufficient years in the bank to get a full pension, she will get a pro rata one and/or she can make additional payments, although conditions do apply. Adding years doesn't just help with BSP, the payment of voluntary NICs also helps towards:

Widowed parent's allowance
Bereavement payment
Bereavement allowance
No, it won't change if you live overseas within the EU.

It depends where you live. We have dual taxation agreements with most countries now. If you intend to live overseas, if that idea is etched in stone, you might consider products such as an offshore bond, which (currently), if started overseas and then bought back 20 years later, would allow return of capital and growth free of tax. In principle, you might not want to consider annuities right now. The rates are pants, they are inflexible and there are many far, far better options out there these days.

There are lots of options though - don't take any of that as advice, see someone suitably qualified who you are happy with and evolve a plan.

[Backwards PLT]

Al R

Thanks very much for the reply - I will definitely get further advice, but your info provides a good base from which to start.

Cheers

[Lima Juliet]

Well how about that? My note from SPVA came today and my commuted lump sum is £3000 bigger than predicted (both by letter and the on-line calculator), my annual Resettlement Commutation amount was smaller by £400 and my annual pension bigger by £300 per year.

The letter arrived exactly 7 days after retirement and the money will be in my account 17 days after leaving.

Spot on! :D:D:D:D:D:D

If only the rest of my experience in the RAF was like that I might have stayed a bit longer!

LJ

[LFFC]

Just to stay on a high note - there's always hope (however faint)!

Public sector pension challenge reaches High Court (http://www.bbc.co.uk/news/business-15428909)

[Mudge]

I have just found out that my service pension will be reduced under the:
National Insurance Modification Rule (MOD).

When you asked questions about this did you get satisfactory answers
or did you get the feeling that Xafinity staff were putting up a smoke screen?

I would like to establish a network communication on this and together we may be able to reveal just exactly what this is all about. Looking forward to sharing information with you.

Mudge

[Al R]

Mudge,

In fairness to them, they administrate pension payments and aren't pensions experts. When you joined up, by default, you became a member of AFPS and as a consequence, were contracted out of SERPS or the State Additional Pension scheme. That was the law at the time (it goes back to when National Insurance was first introduced) and it meant that you couldn’t get the additional pension benefits because you were contracted (or ‘opted’ out of it). As a result, you and the RAF paid lower National Insurance contributions and in return, AFPS trustees agreed that you would receive a military pension no less than the Guaranteed Minimum Pension (GMP) from State Pension Age. GMP was more or less equivalent to the State Additional Pension given up, and the State Additional Pension paid by the State had the GMP knocked off.

However, back in 1948, theGovernment also wanted to make sure that you did not earn two benefits for the same period of service. Simply put, you couldn't be entitled to a GMP and an additional state pension benefit - it'd be like getting flying pay whilst being on PA Spine. So, the service pension/GMP deductions that are catching up with you and which you are currently being pinged with is what you are complaining about (I assume).

But its not all that bad. The good news is once these deductions have been applied, they remain at the same level each year. So as your pension increases, they will take away an ever smaller proportion. Back in the day, you had options (opting out of AFPS would have been the most drastic!) and you could have asked to pay your extraNational Insurance Contributions (thereby compelling the RAF to pay extra too) to remain in the Various guises of State Additional Pension Schemes (ie; not contracted out). However, those types of occupational schemes which left employees and employer paying higher NI contributions for the full Additional State Pension, generally had a less generous pension structure ie; a smaller final salaryaccrual rate.

So, in summary, you got a benefit when you started 'saving' via AFPS and if you live long enough, you're quids in again! For a more leisurely belt and braces explanation, have you tried the Forces Pension Society?

Forces Pension Society - Fighting for the Forces and their Families (http://www.forcespensionsociety.org/)

[Blacksheep]

I reach age 65 in three weeks'time, but have in my possession the annual tax statements for all 14 years of my service from 1963 to 1977. (At one time I had all my pay statements in a box in the attic, but threw them out and kept just the tax evidence) It is clear from these that "GP & NI" contributions were deducted from my pay during my service. So, how do they claim that we didn't pay Graduated Pension Contributions between 1961 and 1980? Are we being robbed? A test case would seem to be in order.

[Al R]

.. NIC were reduced, not removed completely. Having said that, I'd definitely give the Forces Pension Society people a call. Its a technical matter from decades gone by and I imagine they will have this one squared away chapter and verse.

[Mudge]

Hi orionsbelt,

I read your article with interest as I am just about to be on the receiving end of this ruling - 65 this month.

By pure fluke I heard about the NI Modification Rule when I phoned xafinity paymaster regarding another issue in May of this year. The person that I spoke to used the imortal words 'National Insurance Modification Rule'. As I did not have a clue as to what it meant I asked a few questions in order to get some understanding. I soon realized that I was one of possibly a privileged few who had early warning as to what was coming my way; I understand now that most people don't hear about it until it has happened.

Since May I have made several phone calls and most of them have come up with blanks. The most definitive answer I have been given, are you ready for this? All other ex-servicemen accept it why can't you?

Being a bit of a hoarder I found a one-page document amongst other paperwork from when I left the forces 25 years ago. It reads:

Service Pension will be abated at age 65 by a statutory weekly amount of 1.667p for each complete year of reckonable service before 1 April 1980, subject to a maximum deduction of 80p a week. Maybe a play on words on my part but there is no mention of RPI, CPI or any other inflatory tool being applied.

Mudge:confused:

[Mudge]

orionsbelt,

Like you I could not find it in the newsletter. When I asked the question (one of my many phone calls) why it was not mentioned the answer that I was given was "We only put in what we are told to put in".

Mudge

[orionsbelt]

Hi Chaps

Thanks for your input, given your comments I think its time to start making a fuss again.

It’s worth £15 a month to me.

Somebody at XP has interpreted the rules in some manner, but nobody can supply a reference document or statement that defines what is happening.
Where is the rule recorded / defined / authorised? What is the authority that allows then to do this????

A bloody minded ***
Check back in 6 weeks

[Al R]

Chuggers,

Re your #34.. this reminded me..

7.1.
The rules of The Armed Forces Pension Scheme 2005 provide for Pension Credit Members (PCMs) to receive their pension benefits from age 55, earlier than the age prescribed in Section 101C of the Pensions Schemes Act 2003. This instrument amends the scheme rules to provide for PCMs to receive their pension benefits immediately the PCM reaches age 65 or when the pension sharing order takes effect if that is later. A further change provides for a PCM to opt for early payment of their pension benefits from age 55 on actuarially reduced terms. These changes are necessary to comply with the Pension Schemes Act 1993.

.. of another recent stellar SPVA performance.

If a pension sharing order is made against a member of '75, the ex-spouse or civil partner (pension credit member - PCM) receives benefits at 60. For PCMs of '05, benefits will now begin when they reach 65 (see above). Therefore, in essence, members may have been able to take pension benefits at 55 but the ex-spouse etc could not. However, a successful challenge by a Colonel's wife on the warpath (I think!) resulted in change that enabled a PCM to take a pension from 55, hence the hasty revisions last year (above) with a reduction. All well and good so far (possibly).

But the changes were not handled correctly. SPVA somehow forgot to make the reductions and some PCMs received documentation showing the pension payable at 55 as the full rather than an actuarially reduced rate, although the PCM was lead to believe it was the reduced rate. Hence questions in the House and a rather big spotlight on SPVA again. Apparantly, one female PCM has been receiving a pension since 2009 and was recently informed by SPVA that it will now be reduced by 50%.

Business of the House: 26 Apr 2012: House of Commons debates - TheyWorkForYou (http://www.theyworkforyou.com/debates/?id=2012-04-26a.1099.0&s=speaker%3A24839#g1116.1)

[GW844]

Something in the Mail today that also does not bode well:

Why did the tax on my private pension increase when I started drawing my state pension?


By Tony Hazell (http://www.dailymail.co.uk/home/search.html?s=&authornamef=Tony+Hazell)

PUBLISHED: 11:23, 8 August 2012 | UPDATED: 11:23, 8 August 2012


I am a retired prison officer, having served 34 years. I ceased work in 2010 and lived off my Prison Service pension until February of this year when, at 65, I became eligible for my state pension.


When I was living off my Prison Service pension, I was receiving £934.40 a month and paying around £60 tax.


But when I began receiving my state pension — which is £591.96 per month — the income tax on my prison pension went up so I am now receiving just £889.94 on this pension. What is the explanation? D.P., by email



Why has the tax on private pension increased now I've started drawing my state pension?


I was going to say there is a simple explanation — and there is. But then when I considered your tax affairs I quickly realised why so many pensioners get confused and end up paying too much or too little tax.


Let’s start with the basic answer. The state pension is taxable, although it is paid without tax being deducted. This makes life easy for non-taxpayers but can create a headache for those who have other pensions or do paid work.


In order to put your affairs straight, HM Revenue & Customs must, if your income is high enough, adjust your tax code and take extra tax from another pension or an employer.


Here’s how it works in your case. As a pensioner aged 65, you would have a personal allowance of £10,500 this tax year (April 6, 2102 to April 5, 2013). Your total state pension is £7,103.52 a year (that is £591.96 times 12). HMRC would use this to reduce your personal allowance to £3,397.
So, only the first £3,397 of your Prison Service pension will be tax-free.


The remainder will be taxed at 20 per cent.


If your Prison Service pension is £994 a month before tax and your state pension is £591.96, then your total tax bill should be about £1,706 a year, or £142 a month.


Incidentally, as you turned 65 in February your personal allowance should have been £9,940 for the 2011/12 tax year. If HMRC or the Prison Service was not aware of this significant birthday you may have paid too much tax that year.

Dig out your Coding Notice to check. This could open the door to a further rebate. If your income from pensions was less than £12,500 in the 2011/12 tax year, you are eligible to pay tax at just 10 per cent on at least some of the interest from any bank or building societies savings you have.


This is because the first portion of taxable income (£2,560 in that tax year) was taxable at a lower rate of 10 per cent, if and only if, that income came from savings interest rather than pensions or wages.This will have been taxed at 20 per cent by your bank or building so you could reclaim the difference.


If this is the case, you will need a R40 form from HMRC to claim your rebate.


In the previous year (2010/11), you would have received the personal allowance of someone under 65: £6,475.

To make sure you are paying the right amount of tax, contact HMRC and ask for form P161. Call 0845 300 0627 or go to HM Revenue & Customs: Home Page (http://www.hmrc.gov.uk) and type P161 into the search.


Read more: Why did the tax on my private pension increase when I started drawing my state pension? | Mail Online (http://www.dailymail.co.uk/money/experts/article-2185353/Why-did-tax-private-pension-increase-I-started-drawing-state-pension.html#ixzz22xN1vaZl)

[Al R]

Let’s start with the basic answer. The state pension is taxable, although it is paid without tax being deducted. This makes life easy for non-taxpayers but can create a headache for those who have other pensions or do paid work. In order to put your affairs straight, HM Revenue & Customs must, if your income is high enough, adjust your tax code and take extra tax from another pension or an employer.

.. which is why retirement/pension planning for a non tax paying spouse/civil partner is so important. We all have an annual income allowance of (this year) £8105, or £10,500 if you're 65. The part a spouse (usually a wife) can play without realising it is huge, especially if you extrapolate matters over 30 or so years. Instead, invariably, a spouse's tax free annual allowance goes begging and is lost forever.

Rather, the money which goes into the retired household is invariably in the name of a male wage earner who has accrued an attractive military pension and then typically, an airlines and state pension which then gets taxed far too heavily and needlessly. Many retired officers and SNCO/WO will still be Higher Rate Tax payers in retirement (even more if the Lib Dems have anything to do with it); imagine paying 40% tax on £10,500 needlessly for 30 years.

Uncrystalising (or not using) a partner's personal pension has benefits too, in terms of estate/tax planning. One possible solution? Instead of AVCs/added years for your AFPS, consider diversifying and making best use of a partner's allowances. Finally, that letter mentions a 'private' (personal?) pension; it seems the writer had instead, an occupational pension. In this instance though, the type of pension would have little bearing on his predicament.

[Al R]

HMRC released guidance after I wrote that (above) that relates to males considering retirement - but especially to women. The former might want to consider making a decision about how to deal with their pension funds sooner, the latter might want to delay a few months. It doesn't apply to those with 'just' a public sector final salary pension.

http://www.echelonwealthcare.co.uk/retirement-whammy/

As ever, take regulated and authorised advice. ‎ (http://www.echelonwealthcare.co.uk/retirement-whammy‎)

[orionsbelt]

Sorry AI R but as I understand it your tax code statement for over 65s is not completely correct.
Plse see .gov web site.

Personal Allowance for people aged 65-74 = £10,500 But see note 2

The age related allowance limit is £24500.

1.From the 2010-11 tax year the Personal Allowance reduces where the income is above £100, 000 - by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.

2. These allowances reduce where the income is above the income limit for age-related allowances by £1 for every £2 of income above the limit. For the 2010-11 tax year the Personal Allowance for people aged 65 to 74 and 75 and over can be reduced below the basic Personal Allowance where the income is above £100,000.

So if you are prudent enough to have planned for retirement and have pensions say of £31000p/a

Then 31000 - 24500 = 6500, divide that by 2 =3250
Subtract that from £10,500 - 3250 = 7250 which is less than the current personal allowance so you personnel allowance will be £8105

So if your combined pension are above £29290 the higher personnel allowance does not apply to you.

Additionally this allowance is being removed over the next few years

Please correct me if i have it wrong but thats how it is applied to me.

Rdgs ***

[Al R]

You are right to an extent and yes, for incomes greater than the income limit of £25,400 the higher age-related allowance is gradually being removed. When the majority of people reading this will be drawing benefits, I imagine that the allowance will be long gone. Most people want to retire sooner than 65 so I had in mind, two types of people when I was writing that.

Primarily, someone (nominally a wife) who had no personal pension provision and where just a little may have helped. A lot of the upper limits of the age aspects of the allowances wouldn't apply, let alone the nominal amount which might apply (to 'her') at say, 55 if she wanted to cut down her hours of work and (maybe) £400 per month may have helped her do that.

Secondly, many people retiring want to retire before 65, when the age related allowances would kick in anyway (if it hadn't been chopped), and don't forget (I'm sure you know) you can take pension income and still work. There are so many variables and so many computations though, that yes, your scenario does currently apply to some (in particular, you!). As ever though, there is only so much space and an individual might be taxed on income that is derived from more than just pensions.

[Courtney Mil]

I'm moving to France. That'll confuse them. :hmm:

[Al R]

You'll miss the Ospreys.

[Courtney Mil]

Ah. Good point. Time to take up watching boars instead, I guess.

[orionsbelt]

'Courtney Mil '

I'm moving to France. That'll confuse them.

No escape mate, if the UK tax man cant get you the the French will.

And note that the past two weeks have really p.....d them off so to tax the Brits will prove very popular move by Mr Hollande

FRANCOIS HOLLANDE PLANS TAX GRAB ON BRITONS WITH FRENCH HOLIDAY HOMES

Francois Hollande is planning to increase tax for those with French holiday homes
Thursday July 5,2012 By Emily Fox for express.co.uk

BRITONS with French holiday homes will face astronomical tax hikes if Francois Hollande gets his way.

The French President is planning to hike taxes on foreign-owned second homes as part of his plans to revive the nation's ailing economy.

And rather than subjecting his own people to harsh tax rises - Brits and any other foreigners with French holiday homes will face tax hikes across the board.

Ministers in Britain have said they will challenge the move by the new French President, who took over from Nicolas Sarkozy earlier this year.

If the proposed initiatives are to go ahead in France, tax on rental accommodation would rise from 20 per cent to 35.5 per cent applied retrospectively from January 1.

[Al R]

Plus ça change.

https://www.ft.com/content/5b78f944-205c-11e8-a895-1ba1f72c2c11

And an Ombudsman’s determination from earlier this year about overpayments.

https://www.pensions-ombudsman.org.uk/wp-content/uploads/PO-10171.pdf