Pension Q?

Paul.J.M

Hi All,

Does anybody actually know what happens to your immediate pension after 22 years age 40 to age 55?
I have asked SPVA pensions department and currently still awaiting the reply. I have also looked at all the pension litterature on this and can not find the explination for love or money.

I know that when i leave at age 40 with my immediate pension that it will remain the exact same ammount each year until i reach age 55.

Q. What happens reference the index'd linked part for the 15 years until i reach age 55?

ie. Will it go up each year using the RPI or CPI rate of interest and is this compounded interest? In other words for example lets say my immediate pension is 10,000 so hyperthetically lets say after year one and every other year the index linked rate was 2% so

Year 1. 2% of 10,000 = 10,200
Year 2 2% of 10,200 = 10,404
Year 3 2% 0f 10,404 = 10,612.08
etc.....
etc.....
etc....

So at age 55 after 15 of this i will get the final ammount what ever that is????????????

Or am i completely wrong, my friend told me you will get the average ammount of index'd link rate for the 15 years divided by 15 lets say over the 15 year period the average was 3% so he reckons you will get 3%+10,000= 10,300 only, then after that it will go up every year based on the index linked rate???????

The ammount of serving members i have asked and do not know is actually quite remarkable even ones already receiving there pensions before age 55.

Answers and Comments most very grateful

Thank You.

johng_uk

I think that it is index linked from the day you leave until age 55. This would indicate (imo) that it is compounded. However, like many others I am not 100% sure.

I was at a Forces Pension Society brief yesterday (weird timing!) and they may be a poc that you may wish to consider. They are an independant, non-profit making organisation who fight the corner for Forces personnel past and present with regard to pensions.

The downside of them is that they require a yearly subscription fee of £26. This fee allows yourself AND your spouse, a poc with regard to all things pension.

Useful if the worst happens to you and your partner needed help with pensions.

I'm giving joining them serious consideration, but as I have a few years left to do, am waiting until I'm closer to the 22 year point!

Their website is:https://www.forpen.co.uk

Paul.J.M

Thanks John, I actually went to there brief about 3 months ago and never asked that question. I could still ask them without being a member i think, tight git arn't I.

johng_uk

Paul.J.M wrote: »

Thanks John, I actually went to there brief about 3 months ago and never asked that question. I could still ask them without being a member i think, tight git arn't I.

haha,

You could ask mate - Whether they'll answer or not................

:rotfl:

andy208833

I have just left and have also done the pension brief recently. Your index linked pension at 55 puts you on a pension comparable to your rank on leaving e.g i left as a CPO 2009 so will get the same pension at 55 as a CPO leaving in 2024 and then your pension goes up each year in line with the pay rise.

Until 55 pension is fixed (not sure of correct term) and you can commute a lump of the pension worth 15 years 40 - 55

Paul.J.M

thanks mate you have confirmed my thoughts, however i do think you are wrong about receiving the same pension as a CPO would get in 2024? I know it is based on representative pay and it surely would depend on what pay they are on in 2024? remember our pensions are indexed linked for 15 years and will not necessary equal the same ammount as a CPO in 15 years time?

I may be wrong, your thoughts would be appreciated.

Paul

johng_uk

Ok guys here's tha bad news.

I've just spoke to some of the old civvies around these parts who are currently receiving their pensions.

The word is that your pension is only index linked upon reaching age 55. Effectively this means that for every year you've left the service prior to age 55, (assuming that the pension rates rise), your pension is diluted by the same amount!

Sucks huh? Never got sold that one in the careers office!!

Andy_L

johng_uk wrote: »

Ok guys here's tha bad news.

I've just spoke to some of the old civvies around these parts who are currently receiving their pensions.

The word is that your pension is only index linked upon reaching age 55. Effectively this means that for every year you've left the service prior to age 55, (assuming that the pension rates rise), your pension is diluted by the same amount!

Sucks huh? Never got sold that one in the careers office!!

You do get all the back dated index linking though. It's only the immediate pension that is eroded by inflation (which is something you don't get with any other pension scheme so never look a gift horse & all that)

Andy_L

andy208833 wrote: »

and then your pension goes up each year in line with the pay rise.

You receive RPI indexation, not mill pay rises. That may be more or less depending on how pay rises compare to RPI.

johng_uk

Andy_L wrote: »

You do get all the back dated index linking though. It's only the immediate pension that is eroded by inflation (which is something you don't get with any other pension scheme so never look a gift horse & all that)

That's what I thought too mate. But the 3 civvies I spoke to today whom recieve pensions (one whom left the Forces in 2006) beg to differ. One did 26 years, one did 34 and I'm unsure about the other one (although it was over 22 years).

I also know an ex-WO1 who gets a pension of £6k per year. Which is over 33% less than a 22 year Corporal would get in today's money.

Andy_L

Hmm, the book's quite clear:
"This pension will be fixed until you reach the age of 55. At this point it will be increased to take account of the total rise in the cost of living since your service ended"