Can I Cash In My Army Pension?

moonrakerz

dunstonh wrote: »

And even if you could do it, putting it in ISA would be far inferior.

Armed Forces pensions are quite strange. They are classified as "contributory", but you don't make any contributions. When the Military Salary is calculated each year a percentage is deducted for "contributions", but as no money is actually involved there is no "bucket of money" - not even a monetary figure for this non-existent bucket !
So the answer to the OP is a double "no".

Cook_County

moonrakerz wrote: »

Armed Forces pensions are quite strange. They are classified as "contributory", but you don't make any contributions. When the Military Salary is calculated each year a percentage is deducted for "contributions", but as no money is actually involved there is no "bucket of money" - not even a monetary figure for this non-existent bucket !
So the answer to the OP is a double "no".

This is a classic Ponzi scheme. Why would anyone sign up for it if it was explained that way?

System

Cook_County wrote: »

This is a classic Ponzi scheme. Why would anyone sign up for it if it was explained that way?

Because you don't sign up for and you don't get the option to opt out of it.

You are in it whether you like it or not

molerat

!!!!!! wrote: »

Because you don't sign up for and you don't get the option to opt out of it.

You are in it whether you like it or not

Wrong, you can opt out if you wish.

OPTING OUT
Membership of AFPS 75 stopped being
compulsory from 6 April 1988 onwards, so you
can opt out of the Scheme in favour of a personal
pension at any time. However, you need to bear in
mind that you pay no direct contributions towards
your pension entitlement under AFPS 75 and
there is no compensation for withdrawal from the
Scheme. If you are considering opting out, you
should seek advice from an independent
financial advisor

But why anyone would wish to opt out of free money is beyond me.

molerat

moonrakerz wrote: »

Armed Forces pensions are quite strange. They are classified as "contributory", but you don't make any contributions. When the Military Salary is calculated each year a percentage is deducted for "contributions", but as no money is actually involved there is no "bucket of money" - not even a monetary figure for this non-existent bucket !
So the answer to the OP is a double "no".

There is a transfer value for preserved pensions.

moonrakerz

Cook_County wrote: »

This is a classic Ponzi scheme. Why would anyone sign up for it if it was explained that way?

It is no more a Ponzi scheme that the whole National Insurance system - it is all paid out of current revenue.
At least with a private pension scheme the insurance company does invest it and tries to get a better return on it !

hugheskevi

It is no more a Ponzi scheme that the whole National Insurance system - it is all paid out of current revenue.
At least with a private pension scheme the insurance company does invest it and tries to get a better return on it !

Out of interest, what assets would you back the scheme with?

If you fund it using gilts then you are essentially in the same position as the unfunded scheme, because gilts are serviced using future tax revenues, just as the promise behind the unfunded scheme is funded by future tax revenues.

If you fund it with assets other than gilts, then the Government is borrowing money (as the deficit would be larger than it would be if the scheme was unfunded) and investing it in other assets. Is there a reason to think that the Government would be better to increase debt and expose itself to investment risk?