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Military Pension

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Comments

  • uknick
    uknick Posts: 1,771 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    The value of £8k paid today is £8k today.

    The amount paid in 2019 after being inflated since 2004 may well be, as people have estimated, higher. But, the value at today's price is still £8k.


    Leaving my pedantry aside :), I'm grateful for your question. I also took my public sector pension early and will not get an increase until 2017. Whilst I've been told the increase will be backdated to when I first started drawing it in 2012, I've always been a little sceptical this will actually happen as it is not explicitly stated in the rules I've read. But, as two of us have been told the same thing, it must be true.
  • System
    System Posts: 178,353 Community Admin
    10,000 Posts Photogenic Name Dropper
    You can be assured that the military pension does have the increase backdated. I came out in 2005 with my pension and have been receiving my full adjusted pension since 2012.

    When you hit the 55 point you should get a letter detailing each years increase from the time that you started drawing it to show you how the value of the pension is arrived at.
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • freddysmith
    freddysmith Posts: 2,002 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    edited 2 January 2015 at 4:21PM
    Pension % increases from the last 15 years if that is any help


    2000 1.2 RPI
    2001 3.3 RPI
    2002 1.7 RPI
    2003 1.7 RPI
    2004 2.8 RPI
    2005 3.1 RPI
    2006 2.7 RPI
    2007 3.6 RPI
    2008 3.9 RPI
    2009 5.0 RPI
    2010 0 RPI
    2011 3.1 CPI
    2012 5.2 CPI
    2013 2.2 CPI
    2014 2.7 CPI
  • ger2000
    ger2000 Posts: 51 Forumite
    Thanks very much for those figures, with those in mind do you know what my 8K pension would be estimated to be worth at today's rates?
  • molerat
    molerat Posts: 34,663 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 2 January 2015 at 5:21PM
    The age 55 pension is based on the rpi / cpi increases on the uncommuted pension so that figure is needed for the calculation using the increases provided by freddysmith and guesstimates going forward. A ballpark (from mine and a few friends) is around twice the commuted pension after 15 years.
  • ger2000
    ger2000 Posts: 51 Forumite
    molerat, many thanks, appreciated. Seems all those years were worth it.
  • freddysmith
    freddysmith Posts: 2,002 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    I didn't commute and my pension increased by 51% at age 55
  • ger2000
    ger2000 Posts: 51 Forumite
    Thanks freddysmith, I commuted the maximum and I have been told that at 55 the amount commuted will return as normal with index link further being added. Is this true?
  • freddysmith
    freddysmith Posts: 2,002 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Yes your pension will be restored plus the 15 years of pension increases (compounded) then index linked using CPI each following year.
  • molerat
    molerat Posts: 34,663 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    My full pension in 1994 was £5887 fully commuted to £4658 and in 2009 it was uprated to £9052.
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