Be advised - when you are in receipt of a State Pension - YOU WILL START to get a NI related deduction from your Army Pension.
Really? That's a new one to me.Be advised - when you are in receipt of a State Pension - YOU WILL START to get a NI related deduction from your Army Pension.
Does anyone have a rule of thumb about how much NI, or other amounts, would be deducted under this scheme?It's an amount that's calculated when you first get a state pension - then it remains at this fixed amount for the rest of your natural. .
Why am I still paying National Insurance on my army pension? | This is Money
JJ is correct, as I found out when I started receiving my State Pension 2 years ago. The reduction was only a small amount, but it's still money that I no longer receive, there was a short letter explaining why this happens but I've since binned it, so I cannot give any more gen on the reasons.Really? That's a new one to me.
Is the amount of state pension received in any way affected by the service pension, or vice versa?
From a letter I received from Equiniti Paymaster in July 2014 following a phone query from me regarding the deduction on reaching my 65th birthday (which did, indeed, happen):Does anyone have a rule of thumb about how much NI, or other amounts, would be deducted under this scheme?
I was kind of banking on my mil pension, the pension from my current job and the state pension making me quite well off as a crusty. Anybody have any example calculations?
Does 'Reckonable' mean over the age of 18? Or does it mean over the age of 21 as I became LE and that is how my pension was calculated?From a letter I received from Equiniti Paymaster in July 2014 following a phone query from me regarding the deduction on reaching my 65th birthday (which did, indeed, happen):
"When you retired from the Armed Forces you should have been told (and I was - hence the phone call) that your annual rate of pension would be reduced from the date you reached State Pensionable age (65 for men and 60 for women - these have obviously now changed for some people). Under the NI Modification rules (NI MOD), [a] service man enlisting after 30 June 1949 and before 1 April 1980 shall, when he reaches the age of 65 years, have his service pension abated at the rate of £0.8708p a year for each complete year of reckonable service that accrues before 1 April 1980. (my emphasis)
The reduction occurs because, under the National Insurance Regulations (Modification of the Superannuation Acts) 1949, Paymaster is required to abate your pension to take account of the fact that you may also receive a State Pension. The reduction is, however, made regardless of whether you are actually claiming a State Pension."
The National Insurance Adjustment and the Guaranteed Minimum Pension issue is quite a complex affair, and everybody is different. Members of the Forces Pension Society are able to have their personal position explained to them because that is one of the benefits of the annual subscription they pay. The tax conundrum is probably as a result of one of the biggest misconceptions in the pensions world – the state pension is taxable..!! However, no tax is ever deducted, instead the personal allowance you are awarded by HMRC is reduced by the amount of annual state pension you receive. In effect, therefore, you pay the tax due on your state pension via your Armed Forces pension.
That's how mine was calculated. For 2016-17 (reached 65 in June 2016)For those with just a state pension in terms of taxable income, you might wonder how their tax is deducted – well, funny old thing - the state pension does not exceed the basic zero threshold of £11,500 so there is no tax to be deducted anyway.