Armed Forces Pension Scheme - Which one should we go for?

Which Pension Scheme is the best option?

  • Change to the new Pension Scheme.

    Votes: 0 0.0%

  • Total voters
I've been trying work my way through some stuff regarding the planned changes to the pension scheme.

The pension has got to be one of the main reasons most of us hang around. Any decision is going to have to be carefully considered. Has anybody got to the bottom of the proposed changes and the implications for those changing from the current scheme?
Have no idea at the moment, would need to take some independent financial advice before i considered it. One thing, if i stay at the same rank untill retirement, and stay on the old scheme, my pension will be based on representative pay. I will retire on the top increment of my rank on higher band, and under the new scheme my pension will be based on final salary. From that point of view it seems better, but the government never change anything except to save money, so i will be taking advice.
I agree. I know a few people who reckon it is better to stay with the old system unless you are commissioned or looking at commisioning in the future.

You can see a need to change the scheme for the ossifers, at the moment they must feel a bit cheated at the start of their careers under the present scheme.
I recently attended the pension brief in JHQ. The new system comes into effect for all new recruits from Apr 2005 and everyone else has the option to transfer to the new system by 2007.

In brief, the pensions for the military had to change to come in to line with those in the civilian sector. I believe that all relevant information can be found on the Army website.

It does seem that the new system is more designed for those who stay in until they are 55. There does appear to be better benefits for families should partners die in service and in particular if you have kids, i.e. should your partner decide to remarry the benefits are still paid.

I would recommend taking some form of financial advice before opting. I would like to say I will be taking some advice but I'll be gone before I have the choice.
I was recently issued with a graphical comparison between the current and new systems. The new system will only outperform the current after the 22 year point and - in fact - underperforms it prior to this.

Clearly the designer has assumed that we are all able to serve until 55 and may have overlooked the simple fact that the majority of soldiers will be disharged at the 22 year point.

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