MILITARY PENSIONS SENT OVERSEAS

#1
Can anyone advise what exchange rate is used by the "system" when you elect to have your UK military pension sent to an overseas bank account? Is it the prevailing commercial rate, FFR or what?
 
#2
I'd be a bit surprised if you can get the pension sent overseas; its expensive and most schemes pay into a UK bank account.
 

oldbaldy

LE
Moderator
#3
Paymaster pay your pay pension:
Living Abroad
We are pleased to advise you that, following a review of Paymaster’s overseas money transmission arrangements. Citibank have been selected to provide overseas payments transmissions via their Global Payments solution. This change will enable us to eventually offer direct credit services to pensioners in many more countries than those currently covered. Citibank’s global payments infrastructure has been in place for more than 20 years and processes currencies worth billions of pounds annually. Payments are converted to local currency at source utilising wholesale exchange rates, thus ensuring competitive rates for both large and small amounts.
Pensioners will pay a flat fee for each payment to cover both Citibank’s bank charge and Paymaster’s administration. The fee will be deducted from the sterling pension payment prior to conversion and transmission.
If you would like to take advantage of this improved service, you should contact Paymaster
http://www.xafinity.com/portals/3/docs/spva newsletter 2007.pdf
 
#4
Slightly off topic but might be of interest. I believe that if you emigrate (depending on which country you've moved to) your state and military pension will be frozen.

A family friend, a WWII veteran, emigrated to Canada about 20 years ago and has never had an increase in his pension since.

Something to bear in mind if you retire to another country and the Government knows about it.
 

oldbaldy

LE
Moderator
#5
PsyWar.Org said:
Slightly off topic but might be of interest. I believe that if you emigrate (depending on which country you've moved to) your state and military pension will be frozen.

A family friend, a WWII veteran, emigrated to Canada about 20 years ago and has never had an increase in his pension since.

Something to bear in mind if you retire to another country and the Government knows about it.
Incorrect only your state pension is frozen.
Another thread here:
http://www.arrse.co.uk/cpgn2/Forums/viewtopic/t=82967.html
 
#6
oldbaldy said:
PsyWar.Org said:
Slightly off topic but might be of interest. I believe that if you emigrate (depending on which country you've moved to) your state and military pension will be frozen.

A family friend, a WWII veteran, emigrated to Canada about 20 years ago and has never had an increase in his pension since.

Something to bear in mind if you retire to another country and the Government knows about it.
Incorrect only your state pension is frozen.
Another thread here:
http://www.arrse.co.uk/cpgn2/Forums/viewtopic/t=82967.html
My mistake :oops:
 
#7
Great post.

I think that information like this will be very usefull for the many people who plan on jumping ship once they have done there 22.

How about a Retirement sticky in this section??
 
#8
My advice is this: If you can afford it then leave it in your UK Bank account which will get taxed accordingly - If not the Paymaster will pay your gratuity to a foreign bank of your choice at the FFR rate however your pension rate is determined by the commercial rate - ie not very good at the moment 1.34 if you live in a Euro country. So to make a little dosh, tranfer your gratuity only to take advantage of the FFR rate.
 
#9
Caspiandood said:
My advice is this: If you can afford it then leave it in your UK Bank account which will get taxed accordingly - If not the Paymaster will pay your gratuity to a foreign bank of your choice at the FFR rate however your pension rate is determined by the commercial rate - ie not very good at the moment 1.34 if you live in a Euro country. So to make a little dosh, tranfer your gratuity only to take advantage of the FFR rate.


Anyone any idea of the FFR Euro rate?
 
#10
1.3 in NAAFI today
 
#11
Filbert Fox said:
1.3 in NAAFI today
Thanks Filbert, but 1.3 what? (there is a whole world of difference between 1.30 and 1.39).

As an aside, I have just spoken to Xafiniy Paymaster who inform me that to send my military pension abroad each month through Citibank will cost me £2.60 per month. Citibank using the business exchange rate which is obviously much beter than the tourist rate, but I am now considering having my pension paid to a UK bank each month and then once every six months getting it transferred to my foreign bank account using Currencies Direct who charge nothing for amounts over £5000 - just a thought at the moment, I have 9 months (and counting) to work it out!
 
#13
right-grumpy said:
FFR is 1.40
FFR is only for Mil, dep and civ component and is currently £=€1.40
BFPO rate £=€1.34 if post office use allowed.
Com rate today was £=€1.31.
There are big differences as I found when I left. You will have to pay some tax on your monthly pension in UK or country of abode if you opt for transfer these rates of tax also vary. :x
 
#14
and the NAAFI rate is in a world of its own.
 
#15
GrumpyGit said:
Caspiandood said:
My advice is this: If you can afford it then leave it in your UK Bank account which will get taxed accordingly - If not the Paymaster will pay your gratuity to a foreign bank of your choice at the FFR rate however your pension rate is determined by the commercial rate - ie not very good at the moment 1.34 if you live in a Euro country. So to make a little dosh, tranfer your gratuity only to take advantage of the FFR rate.


Anyone any idea of the FFR Euro rate?
You would have to ask the PMG for the exact rate they use. Their rate and charges are a good deal apparently. At the moment the Pound is down to about € 1.30 or maybe a bit more.

If residing in EEC countries, UK Inland Revenue will tax at the appropriate rate minus the personal allowance. There is also no NI contribution (11%)payable. What the local tax authorities do is a different matter. Here in Germany I have no further tax to pay. I have had this confirmed by 3 independant sources including my tax advisor. This means I get a lot more of my pension than if I were to reside in UK, nice little bonus.
 

oldbaldy

LE
Moderator
#16
Drlligaf said:
If residing in EEC countries, UK Inland Revenue will tax at the appropriate rate minus the personal allowance. There is also no NI contribution (11%)payable. What the local tax authorities do is a different matter. Here in Germany I have no further tax to pay. I have had this confirmed by 3 independant sources including my tax advisor. This means I get a lot more of my pension than if I were to reside in UK, nice little bonus.
NiC is not payable on pensions in the UK either. So no difference where you live on that one.
 
#17
Never thought Id say it - but I agree with oilrigs comment! (personal joke...)

If you can, leave in UK, and use for paypal, amazon, internet shopping ,holidays through a UK comapny etc.

If you do need to draw cash, consider HSBC Bank Account Plus which has no handling charge for cash withdrawls outside of UK, but has a monthly charge.
 
#18
There is another aspect to consider for anyone deciding to emmigrate after leaving the forces.

I can only give advice on Canada as thats where were off to but it could have a big impact financialy and with planning departure dates to make the move.

IF you have any form of residential ties to Canada at the time your Lump sum tax free gratuity is paid to you even though it is tax free in the UK it WILL be taxed in Canda by the Canadian Revenue Authority (CRA) and depending on where your living within Canada this could be a smuch as 42%. In Canada your taxed on your "World Wide Income" & Both countries tax authorities DO work closely with one another and even though it is down to you to declare it not to do so will be tax evasion and carries a prison sentence in Canada. As long as you recieve your lump sum prior to leaving for Canada the Canadians have no interest in it.

This cocked up our plans as I intended to do a civvie work attachement in Canada then start work on term leave therefore having no break in wages....BUT obviously to do this would mean I would already be paying Canadian Tax and living in Canada while still serving then I would recieve my Pension & Gratuity X amount of days later....and then be taxed on it. So now we will have to leave the forces, get the gratuity then depart for Canada.

Explaination of Residential ties:

http://www.cra-arc.gc.ca/tax/nonresidents/common/residency-e.html


Your military pension will be indexed linked & will be taxed by the Canadians as this will then become your main residency.

Your state pension will be frozen at the same amount the day you draw it till the day you die & this applies to mainly ALL of the Commonwealth countries, but not the USA, Bosnia, Israel and some other places. Unless you have a period of residency or return to the UK where you will recieve all the missing increments.

http://www.thepensionservice.gov.uk/ipc/home.asp

Hope this Helps someone.

PS

If you don't need your pension all the time and let it build up in a UK account then decide to shift it overseas yearly for example to save on constant exchange rate charges then you'd be better off using one of the specialist finance companies such as:

http://www.hifx.com/
http://www.halofinancial.com/
http://www.moneycorp.com

These companies do not charge any commission for transfers. You can get a locked in rate for up to 2 yrs if you think for example the rates will drop. You can instruct them to transfer as soon as the rate reaches a pre agreed rate as the rates spike now and again. They shift millions on a daily basis and you'll get a far higher rate of exchange than with any bank or high street de change.
 
#19
I was under the impression (maybe misguided impression) that if you move abroad to live and become a resident of your adopted country, then you could not keep a UK bank account open?
 
#20
GrumpyGit said:
I was under the impression (maybe misguided impression) that if you move abroad to live and become a resident of your adopted country, then you could not keep a UK bank account open?
In these days of the Internet and accommodation addresses, who is going to know? But it would be up to the rules pertaining in your country of adoption.

Litotes
 

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