Do you really understand your pension?

Do you really understand your pension?

  • YES: All explained and perfectly clear.

    Votes: 0 0.0%
  • NO: All explanations are complete gobblygook.

    Votes: 0 0.0%
  • DONT KNOW: I keep reading about all these changes. Just confused now.

    Votes: 0 0.0%
  • DONT CARE: As long as I get something at the end.

    Votes: 0 0.0%
  • FEEL CHEATED: Recent changes confirm how devalued I feel

    Votes: 0 0.0%

  • Total voters
    0
#1
Honesty Poll: Clever REME people out there....You have had all the briefs but do you really know what is going on with your pension?
 
#2
Heres one for you - I'm sure I already know the answer to this one -

Do the 5 year and 8 year bonuses affect the pension (AFP75) in any way at all??
 
#3
Rockstar said:
Heres one for you - I'm sure I already know the answer to this one -

Do the 5 year and 8 year bonuses affect the pension (AFP75) in any way at all??

yes it do's.
 
#4
I do but after working out the ins and outs of if you take V eng it seems that the pension doesnt increase at all if you work extra years. Does that mean your say for instance £10,000 you would get each year now actually goes to pay your wages instead for the extra years you do. :?
 
#7
The_IRON said:
I do but after working out the ins and outs of if you take V eng it seems that the pension doesnt increase at all if you work extra years. Does that mean your say for instance £10,000 you would get each year now actually goes to pay your wages instead for the extra years you do. :?
I'm definately not a guru but here's my tuppence (oh the irony!)

Use the Armed Forces Pension calculator - (Not very Firefox friendly)

If you stick in all your details as per getting out at 22 years, then go back and just change the end date by, say, 2 years, it should give you the difference.

For me 2 years increase gives me about £2000 extra on the terminal grant and about £650 extra on the annual pension (both pre-tax).

Interesting point if you're not asleep yet is for those 2 years I wont have been drawing my pension, so will I actually lose out? Really depends exactly how long I live I suppose! 8O


The_IRON - Not sure if that's the point you meant???
 
#8
counterstrike said:
The_IRON said:
I do but after working out the ins and outs of if you take V eng it seems that the pension doesnt increase at all if you work extra years. Does that mean your say for instance £10,000 you would get each year now actually goes to pay your wages instead for the extra years you do. :?
I'm definately not a guru but here's my tuppence (oh the irony!)

Use the Armed Forces Pension calculator - (Not very Firefox friendly)

If you stick in all your details as per getting out at 22 years, then go back and just change the end date by, say, 2 years, it should give you the difference.

For me 2 years increase gives me about £2000 extra on the terminal grant and about £650 extra on the annual pension (both pre-tax).

Interesting point if you're not asleep yet is for those 2 years I wont have been drawing my pension, so will I actually lose out? Really depends exactly how long I live I suppose! 8O


The_IRON - Not sure if that's the point you meant???
Yes it is, i suspect the same. Realistacally you are still ending up with about the same amount on your pension after you have increased by 2-5 years. So they will be paying you your normal wage of say 35K for extending and save on those extra years of your annual pension 10K a year.
Theres some clever people in the treasury.... sorry No. 10.
 
#9
WRAPJOBAGAIN said:
Rockstar said:
Heres one for you - I'm sure I already know the answer to this one -

Do the 5 year and 8 year bonuses affect the pension (AFP75) in any way at all??

yes it do's.
No it doesn't; they are non-pensionable! And therefore cheaper than paying a proper salary!

Litotes
 
#10
The_IRON said:
counterstrike said:
The_IRON said:
I do but after working out the ins and outs of if you take V eng it seems that the pension doesnt increase at all if you work extra years. Does that mean your say for instance £10,000 you would get each year now actually goes to pay your wages instead for the extra years you do. :?
I'm definately not a guru but here's my tuppence (oh the irony!)

Use the Armed Forces Pension calculator - (Not very Firefox friendly)

If you stick in all your details as per getting out at 22 years, then go back and just change the end date by, say, 2 years, it should give you the difference.

For me 2 years increase gives me about £2000 extra on the terminal grant and about £650 extra on the annual pension (both pre-tax).

Interesting point if you're not asleep yet is for those 2 years I wont have been drawing my pension, so will I actually lose out? Really depends exactly how long I live I suppose! 8O


The_IRON - Not sure if that's the point you meant???
Yes it is, i suspect the same. Realistacally you are still ending up with about the same amount on your pension after you have increased by 2-5 years. So they will be paying you your normal wage of say 35K for extending and save on those extra years of your annual pension 10K a year.
Theres some clever people in the treasury.... sorry No. 10.
Whilst I agree that, on the face of it, that is what happens, you are ignoring the boost that soldiering-on gives to your pension, in due course.

You should really sit down for a session with Excel and the function called "NPV". Net Present Value gives you today's value of a series of payments (also called a pension or salary) made in the future.

So, you serve 22 years and are offered 2 years more. Using Counterstrike's figures, that means another £650 pa on the pension and almost £2000 on the gratuity. To keep it simple, assume that is ONE year's pension.... Cell 1=NPV(0, E10:Y10). Key in £2650 into Cell 2 which is Year 1 (gratuity plus pension) then £650 for each year that you reckon you will live... say 20 years.

Excel shows about £15k. So for working one additional year, you have drawn your salary and earned yourself a pension pot of £15k (which is what it effectively is). That pension pot pays out over the next 20 years - or as long as you live with shot knees, liver, PTSD, etc.

Why isn't this in the Finance forum?

Litotes
 
#11
Litotes said:
Whilst I agree that, on the face of it, that is what happens, you are ignoring the boost that soldiering-on gives to your pension, in due course.

You should really sit down for a session with Excel and the function called "NPV". Net Present Value gives you today's value of a series of payments (also called a pension or salary) made in the future.

So, you serve 22 years and are offered 2 years more. Using Counterstrike's figures, that means another £650 pa on the pension and almost £2000 on the gratuity. To keep it simple, assume that is ONE year's pension.... Cell 1=NPV(0, E10:Y10). Key in £2650 into Cell 2 which is Year 1 (gratuity plus pension) then £650 for each year that you reckon you will live... say 20 years.

Excel shows about £15k. So for working one additional year, you have drawn your salary and earned yourself a pension pot of £15k (which is what it effectively is). That pension pot pays out over the next 20 years - or as long as you live with shot knees, liver, PTSD, etc.
While I see your point re an extra 15k into pension pot, while still being paid salary, I still don’t quite see how that benefits me. If I left at 22 yr point and took alternative employment paying a similar salary would I not receive 10k or thereabouts in pension also in each of those 2 years? Meaning that in those 2 years working for another employer I’m getting 20k in pension on top of my salary, whereas soldiering on I would only be receiving my salary plus the 15k in the pot you mention. Doesn’t this make me 5k worse off overall? Or am I just not understanding something?
 
#12
counterstrike said:
Litotes said:
Whilst I agree that, on the face of it, that is what happens, you are ignoring the boost that soldiering-on gives to your pension, in due course.

You should really sit down for a session with Excel and the function called "NPV". Net Present Value gives you today's value of a series of payments (also called a pension or salary) made in the future.

So, you serve 22 years and are offered 2 years more. Using Counterstrike's figures, that means another £650 pa on the pension and almost £2000 on the gratuity. To keep it simple, assume that is ONE year's pension.... Cell 1=NPV(0, E10:Y10). Key in £2650 into Cell 2 which is Year 1 (gratuity plus pension) then £650 for each year that you reckon you will live... say 20 years.

Excel shows about £15k. So for working one additional year, you have drawn your salary and earned yourself a pension pot of £15k (which is what it effectively is). That pension pot pays out over the next 20 years - or as long as you live with shot knees, liver, PTSD, etc.
While I see your point re an extra 15k into pension pot, while still being paid salary, I still don’t quite see how that benefits me. If I left at 22 yr point and took alternative employment paying a similar salary would I not receive 10k or thereabouts in pension also in each of those 2 years? Meaning that in those 2 years working for another employer I’m getting 20k in pension on top of my salary, whereas soldiering on I would only be receiving my salary plus the 15k in the pot you mention. Doesn’t this make me 5k worse off overall? Or am I just not understanding something?
BING.....

Edit - and 20k IN THE FIRST 2 YEARS, not over 20...which equates to fcuk all...
 
#13
counterstrike said:
Litotes said:
Whilst I agree that, on the face of it, that is what happens, you are ignoring the boost that soldiering-on gives to your pension, in due course.

You should really sit down for a session with Excel and the function called "NPV". Net Present Value gives you today's value of a series of payments (also called a pension or salary) made in the future.

So, you serve 22 years and are offered 2 years more. Using Counterstrike's figures, that means another £650 pa on the pension and almost £2000 on the gratuity. To keep it simple, assume that is ONE year's pension.... Cell 1=NPV(0, E10:Y10). Key in £2650 into Cell 2 which is Year 1 (gratuity plus pension) then £650 for each year that you reckon you will live... say 20 years.

Excel shows about £15k. So for working one additional year, you have drawn your salary and earned yourself a pension pot of £15k (which is what it effectively is). That pension pot pays out over the next 20 years - or as long as you live with shot knees, liver, PTSD, etc.
While I see your point re an extra 15k into pension pot, while still being paid salary, I still don’t quite see how that benefits me. If I left at 22 yr point and took alternative employment paying a similar salary would I not receive 10k or thereabouts in pension also in each of those 2 years? Meaning that in those 2 years working for another employer I’m getting 20k in pension on top of my salary, whereas soldiering on I would only be receiving my salary plus the 15k in the pot you mention. Doesn’t this make me 5k worse off overall? Or am I just not understanding something?
I can't see any flaw in your argument, other than almost certainly having to pay 40% tax; what I was trying to show that it isn't always as straight-forward as people make out. The 75 pension scheme is quite valuable. (The 05 pension scheme, IMHO, which is nowhere near as valuable, will not keep people in and will act as a financial disincentive in due course).

Litotes
 
#14
Litotes said:
[
I can't see any flaw in your argument, other than almost certainly having to pay 40% tax; what I was trying to show that it isn't always as straight-forward as people make out. The 75 pension scheme is quite valuable. (The 05 pension scheme, IMHO, which is nowhere near as valuable, will not keep people in and will act as a financial disincentive in due course).

Litotes
Im a bit weary of the 40% tax bracket as well when i start on my resettlement soon. It basically limits you to getting a job under 30K when you get out or a very large sum to make it worth paying the 40% threshold. I might become a male prostitute :roll:
 
#15
The_IRON said:
Im a bit weary of the 40% tax bracket as well when i start on my resettlement soon. It basically limits you to getting a job under 30K when you get out or a very large sum to make it worth paying the 40% threshold. I might become a male prostitute :roll:
I've seen you in the flesh and i can guarantee that as a rent boy you'll not make £30K a year. :)
 
#16
Fallschirmjager said:
The_IRON said:
Im a bit weary of the 40% tax bracket as well when i start on my resettlement soon. It basically limits you to getting a job under 30K when you get out or a very large sum to make it worth paying the 40% threshold. I might become a male prostitute :roll:
I've seen you in the flesh and i can guarantee that as a rent boy you'll not make £30K a year. :)
Im moving away from Colchester because you tight CNUTS down pay the going rate.
 
#18
The_IRON said:
Litotes said:
[
I can't see any flaw in your argument, other than almost certainly having to pay 40% tax; what I was trying to show that it isn't always as straight-forward as people make out. The 75 pension scheme is quite valuable. (The 05 pension scheme, IMHO, which is nowhere near as valuable, will not keep people in and will act as a financial disincentive in due course).

Litotes
Im a bit weary of the 40% tax bracket as well when i start on my resettlement soon. It basically limits you to getting a job under 30K when you get out or a very large sum to make it worth paying the 40% threshold. I might become a male prostitute :roll:
I'm in the same boat with both resettlement and 40% tax. But it's been a strange couple of weeks; firstly, the resettlement clerk managed to catch me and remind me that I must book my first interview (she said she was surprised that the computer had coughed out my name because I looked so much younger... but I could tell that she was taking the michael)! Then Records offered me a sunshine posting.

So, I am in my final two years and they offer me a sunshine posting? Someone's having a laugh! Why couldn't they have offered me a sunshine posting ten years ago? So, I discussed it with a couple of mates and found that I wasn't the first to be offered the job... By the looks of it, Records is so desperate to fill the job that they offered it to me!

I said "no" and have been wondering since if that was the right thing to do!

Litotes
 
#19
Litotes said:
The_IRON said:
Litotes said:
[
I can't see any flaw in your argument, other than almost certainly having to pay 40% tax; what I was trying to show that it isn't always as straight-forward as people make out. The 75 pension scheme is quite valuable. (The 05 pension scheme, IMHO, which is nowhere near as valuable, will not keep people in and will act as a financial disincentive in due course).

Litotes
Im a bit weary of the 40% tax bracket as well when i start on my resettlement soon. It basically limits you to getting a job under 30K when you get out or a very large sum to make it worth paying the 40% threshold. I might become a male prostitute :roll:
I'm in the same boat with both resettlement and 40% tax. But it's been a strange couple of weeks; firstly, the resettlement clerk managed to catch me and remind me that I must book my first interview (she said she was surprised that the computer had coughed out my name because I looked so much younger... but I could tell that she was taking the michael)! Then Records offered me a sunshine posting.

So, I am in my final two years and they offer me a sunshine posting? Someone's having a laugh! Why couldn't they have offered me a sunshine posting ten years ago? So, I discussed it with a couple of mates and found that I wasn't the first to be offered the job... By the looks of it, Records is so desperate to fill the job that they offered it to me!

I said "no" and have been wondering since if that was the right thing to do!

Litotes
check pms mate
 
#20
Depends where the sunshine job is. Can you get back for job interviews and exams (if you are studying for any professional qualifications)? How will you network for your next job?

Binning it was probably a good idea.
 

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