Armed Forces Pensions Abroad

Paulmeldon

I was happily looking forward to my retirement in South Africa drawing my Army pension over there, when someone I was chatting to mentioned that he thought that if you move overseas when you retire, the Army reduces your pension. Does anyone have any information on this? If true it seems to be immoral - I have paid all these years into my pension (don't believe the rubbish they talk about your pension being non-contributary, they reduce your X Factor by 7% to pay for it!), only to have it reduced because of a lifestyle choice!

Andy_L

IIRC as a public sector pension it will be subject to UK income tax but there won't be any direct reduction in the amount of pension.

Also, again IIRC, S.Africa is one of the countries where your state pension won't increase with RPI each year.

tighttrooper

Where can I find out where else the pension will not increase with the RPI?
Is the forces pension taxable by HMG wherever you are in the world?
By the 'state pension won't increase' do you mean what I call the forces pension won't increase?

Andy_L

The "Digest of Double Taxation Treaties" gives you the tax status of "Government Service Pensions" worldwide. Some countries won't tax it again because it has already been taxed by HMG some will. Unsurprisingly it depends on how well we get on. S.Africa looks like one of the countries that won't tax it again.
http://www.hmrc.gov.uk/cnr/uk_gov_pensions.htm (link to document is about 1/2 war down)

I believe that HMG can tax a Government Service Pensions whereever you are in the world, although you get your full UK tax allowance to offset against it

by 'state pension won't increase' i mean the "state pension" :-) ie the state pension paid to everyone who's paid NI contributions, not an Occupational pension related to governmet employment (eg your military pension, civil service, NHS etc)

Paulmeldon

Thanks Andy, that sets my mind at rest! To be honest, I had kinda given up on the State Pension as I had no idea that I could draw it abroad! So, in short, I came to this forum fearful of losing some of my pension and have left looking forward to even more! You're a star!

Paul.J.M

Paulmeldon wrote: »

I was happily looking forward to my retirement in South Africa drawing my Army pension over there, when someone I was chatting to mentioned that he thought that if you move overseas when you retire, the Army reduces your pension. Does anyone have any information on this? If true it seems to be immoral - I have paid all these years into my pension (don't believe the rubbish they talk about your pension being non-contributary, they reduce your X Factor by 7% to pay for it!), only to have it reduced because of a lifestyle choice!

It just goes to show people will say anything, of cousre its not reduced.

I live in Cyprus and will shortly be recieving my RAF pension, Cyprus is one of the countries which has the "Double Taxation Treaty" agreement with the UK. My circumstances are that I have decided to pay Cyprus taxation on all my income including overseas money (RAF Pension, Interest on savings,etc) Cyprus personnel income tax is; you have 2 chioces, I have chosen the option of the first 17,000 Euro is tax free, so i will pay no tax on my pension because it is not more than 17,000 euro.
Cyprus is the lowest taxation country in europe, which makes it a very attractive the place to live. LOL especially UK pensioners.

or8it

Your pension won't be reduced however as I understand it depending on what country you retire to your pension will become 'frozen'.
ie at the age of 55 your pension is index linked and increases year on year. The point at which you move to another country the pension stays at that rate and is no longer index linked.
I believe South Africa may well be one of those countries where your pension will be frozen.