Defer Army pension

Steveswift

Hi all,

I get my full Army pension in 3 years in May (55 years old) and i am looking to find out if i should reinvest it somewhere, does any body know if the armed forces have a reinvestment scheme?

I am in the higher tax bracket and hopefully will remain there for some time, I already give up 40% of the Army pension to tax and i want to see if i can avoid this when i get the full pension.

Many thanks


Steve

Trying_to_be_good

There isn't anything like this provided by MOD, but you would presumably get tax relief (subject to the usual HMRC annual allowance and lifetime allowance) on anything contributed to another pension.

Steveswift

Thanks for the reply sir

tocsin

One option is to use a SIPP (Self-Invested Personal Pension) - you do need to have the time and inclination to manage the investments (or a financial adviser to do it for a fee). A SIPP gets tax relief, like all pensions, at your highest rate.

I managed to remove all my 40% liability by putting the lump sum money I didn't need into one, which I now manage myself - the last two years have been good for investments, but that won't always be the case.

Have a look in the Pensions section of this board if you want more info on SIPPs and how they work.

Good luck!

Andy_L

AIUI you can't use income from a pension to invest in a pension (know as recycling) so you would need an alternate income stream to invest in a pension and receive the tax relief.

Look at this thread on the pension board on the relative merits of pensions & ISAs
https://forums.moneysavingexpert.com/discussion/375217

Steveswift

Thank you all for the replies.

Steve