This may be of Interest if your just about to complete 22 Years

Cat695

As most of you serving know most of what you hear is rumour control

Well heres something thats not a rumour.

A close friend has just completed 22 years (Army) and left as a SSgt

He got 52 half grand tax free in his bank and obviously commuted the full amount.

His monthly pension AFTER tax is £778 (however this will drop to about £660 a month as he doesn't have to pay tax for a few months)

Better than a kick in the B*llocks...probably not the best time to get out but he doesn't care as his missus is a millionairess.

But I thought you would like to know

Ivrytwr3

yes, it's called a lump sum and pension, payable after............22 years service!

Armed Force Pension calculator:

http://www.mod.uk/DefenceInternet/AboutDefence/WhatWeDo/Personnel/Pensions/ArmedForcesPensions/PensionsCalc/PensionsCalculator.htm

However, according to the calculator, a SSgt with 22 years service on the higher pay band at level 7 should only get a payout of £34254. Unless he has other qualifying pay incentives.

Cat695

Ivrytwr3 wrote: »

yes, it's called a lump sum and pension, payable after............22 years service!

Armed Force Pension calculator:

http://www.mod.uk/DefenceInternet/AboutDefence/WhatWeDo/Personnel/Pensions/ArmedForcesPensions/PensionsCalc/PensionsCalculator.htm

However, according to the calculator, a SSgt with 22 years service on the higher pay band at level 7 should only get a payout of £34254. Unless he has other qualifying pay incentives.

I know what it is as I'm a SSgt to!!

He commuted his pension across hence why he got 52 and not 34...otherwise he would have got about £1200 a month instead of the £778....however the monthly pension is taxable unlike the lump sum hence why most people commute

Alias_Omega

I know people who have signed on for 22 years, and took redundancy, and received £80k plus, and a pension at 65.

Thats the way the cookie crumbles, but if you reach your 22 years, well 20.5 years and your not going to get promotion, then really resettlement and lots of leave is the way forward.

Cat695

Alias_Omega wrote: »

I know people who have signed on for 22 years, and took redundancy, and received £80k plus, and a pension at 65.

Thats the way the cookie crumbles, but if you reach your 22 years, well 20.5 years and your not going to get promotion, then really resettlement and lots of leave is the way forward.

If they do bring in redundancy again (which I don't think they will for a long time yet) and they offered what they did last time I would be gone like a shot.

Francesanne

I thought he'd have to pay tax on any amount over £30,000 or does that only apply to redundancy payments? I worked for a firm for 34 years and got a generous payoff but had to pay tax on the extra. I also took a lump sum from my pension and now receive a smaller company pension but I'm happy with the choice I made. Think that guy deserves every penny he received when you consider what payoffs & pensions civil servants receive when they retire or take redundancy.

Cat695

Francesanne wrote: »

I thought he'd have to pay tax on any amount over £30,000 or does that only apply to redundancy payments? I worked for a firm for 34 years and got a generous payoff but had to pay tax on the extra. I also took a lump sum from my pension and now receive a smaller company pension but I'm happy with the choice I made. Think that guy deserves every penny he received when you consider what payoffs & pensions civil servants receive when they retire or take redundancy.

Nope hence why most guys leaving commute as much as possible

1) its tax free where as the pension isn't.
2) You could (though with the current low interest rates) make more if you invested the larger amount rather than living off a larger monthly pension.
3) at 55 it shoots back up again.

CHR15

Pension looks a little high to me, by about £100 per Month. Are you sure thats AFTER tax?

Andy_L

Francesanne wrote: »

consider what payoffs & pensions civil servants receive when they retire or take redundancy.

Hmm yes, less than the military get :rolleyes:

Cat695

CHR15 wrote: »

Pension looks a little high to me, by about £100 per Month. Are you sure thats AFTER tax?

Thats what he said today.....thats two SSgt's I know that get around that amount now

quick sums

a yearly pension after fully commuting is around 9300 - the 22% tax comes to around 7200 which spread over 12 months is around 600+ quid (but my maths are pants

I don't know how upto date the pension calc is on the website....I don't think it takes into consideration yearly inflation rise etc....but I'm not sure in that.

CHR15

Around £660 should be correct, don't forget for the first few months the Tax codes will be all over the shop.

If they have gone straight into employment, give them a nudge to ensure BOTH tax offices are aware of the income from the other. Tax offices DO NOT communicate. the Forces Pension Office will have no idea there is an employment Tax Office too (and vice versa), they will be getting the same Tax benefits from BOTH incomes.

If your mates don't inform the tax offices there is more income, they will be paying insufficient Tax. It happens to most people leaving.

Some of my friends have fallen foul. One had a Tax code of 16L in his second year because he hadn't been paying enough, another had to stump up over £2K......twice!!