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ARMED Forces AFP75 Deferment

Hi,

I have been searching for my specific question with no success. The MOD sites dont answer my specific question.

I am approaching age 60 and going through the motions of claiming my military pension (served 10 years 1975 to 1985).
I have sent off the form for the quotation for what I would get (fish and chip money once a month I expect).

What I want to know is: Is there any benefit in NOT claiming it yet, but holding off until I reach 66? Does the fund continue to grow if I defer claiming?

The reason for asking is because I suspect I would pay 40% income tax on it. so I would rather wait until I finish working and as such come out of the 40% Tax bracket. If the pension pot doesnt grow once you reach 60, I cant see any point in deferring it.

Thanks in advance.

Comments

  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
    Uniform Washer
    edited 10 February 2019 at 12:10PM
    Does the fund continue to grow if I defer claiming?

    Do you actually have a "fund" or is this is defined benefit scheme?

    Have you read the scheme rules?

    And you either have incredibly expensive fish and chips or are going to be pleasantly surprised with the amount.
  • Thanks for that. TBH I dont know. I have a preserved pension under AFP 75.
    There isnt a great deal of information available. But I will continue to search for the rules.

    From your final comment, looks like I have grossly underestimated the cash I will get.
  • peterg1965
    peterg1965 Posts: 2,166 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    No expert, but I don't think there is an option of deferment on a preserved AFPS75 pension. But then again, I don't know what would happen if you 'forgot' to claim it for a few years.

    I would definitely recommend joining the Forces Pension society. Its not expensive, and they offer some exceptionally good advice to members on all aspects of the variety of AFPS pensions. https://www.forcespensionsociety.org
  • unforeseen
    unforeseen Posts: 7,465 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    edited 10 February 2019 at 1:08PM
    There isn't a pension pot so doubt payments would increase IF you could defer it. You may get the backdated money that you would have been due. You need to talk to the veteran's agency.
  • Muscle750
    Muscle750 Posts: 1,075 Forumite
    I havent seen any ex military people i know with a next to nothing pension.
  • From your final comment, looks like I have grossly underestimated the cash I will get.

    Well I wouldn't order a Ferrari just yet but I think you might be to sit in and eat your fish and chips. Fortnightly maybe. Instead of take out once a month :)

    I don't know anyone who's been in the armed forces but 10 years service presumably followed by 34 years of inflation increases of some sort should amount to something worth having. Even allowing for 40% tax in the short term.
  • Found it. Because its a preserved pension, it goes on the highest years earnings in your last three years of service COMBINED with highest rank held over the last 5 years of service. All index linked.

    So it looks like 35 years growth on my best earnings as a full corporal (or acting lance corporal. PLUS a lump sum of twice the pension value (so a holiday is coming).

    There is no point in deferring it, cos its a for life pension. I might as well claim it and take the 40% tax on the chin (until age 66).

    For those interested. The document is here

    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/405070/MMP106_Web_Accessible_Version_pension_scheme_explained.pdf
  • molerat
    molerat Posts: 35,918 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    BBurkill wrote: »
    There is no point in deferring it, cos its a for life pension. I might as well claim it and take the 40% tax on the chin (until age 66).
    Or put it away in a pension to get he tax back.
  • Silvertabby
    Silvertabby Posts: 10,662 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    edited 10 February 2019 at 2:51PM
    “ There is no point in deferring it, cos its a for life pension. I might as well claim it and take the 40% tax on the chin (until age 66).
    Originally posted by BBurkill
    Exactly. Claim it and get 60%, don't claim it and get 0%.

    And ... the tax free lump sum is 3 x your annual pension, not 2 x.
  • Hi i turned 60 recently and claimed my pensuon. It worked out as I thought it would. I left in 1985 too with 9 years qualifying service. The lump sum is 3_times pension and the index linking made it 3 times the amount i was quoted when I left in 1985. If you claim 4 months before your 60th birthday they actually start working on it in your burthday. My notification of pension arrived about 3_weeks after my birthday. Since there is no pension pot as such I don't think the amount would increase other than the index linking and I didn't look into backdating as I applied for it as it became due. Hope this helps.?
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