Discussion in 'Finance, Property, Law' started by agoodgrouping, Jan 18, 2006.

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  1. Saw some mind blowing graphics and figures today, not sure who is foolin' who.

    My thoughts on AFPS 05:

    If you leave much nearer to 55 than 40 it may be worth considering, but watch those MSF losses & the commutation penalties.

    If you intend dying in Service it may be worth considering.

    If you are going out onto a very high paid job and your pension will kick you into the Higher tax bracket it may be worth considering.

    Do not get confused by the second lump is only paying you back what they have kept from you over many years :

    eg AFPS 75 Pension @ 40 is 12k. Lump sum 36, IP 15 years @12k then uplift & RPI.
    AFPS 05 Pension 12k, Lump sum 36, EDP 15 years 6k, edp 55-65 8k+ RPI, 65+ 12k+RPI & 2nd lump sum index linked from endex.

    15 x 6 =90, 10 x 4 = 40...90 + 40 = 130k....a lot of money - will your 2nd lump sum @ 65 (if you live that long) be worth it & won't you have needed the money earlier in life ?? Extra family benefits can be arranged much cheaper through a IFA

    Get on the pens calculator - for most people the new scheme is a no no.
  2. Is the pension calculator still available?
  3. I haven't even had the first OTT yet, let alone edition 52.
  4. Do the calculator but also compare the total ammount received say out to 75 i.e beyond the second lump sum, to get a proper picture of the difference between the 2 schemes.
  5. I've seen a pretty good spreadsheet that does just that. It was designed by a couple of REME guys in their 50s (I assume) and takes you out to 75 - which they explain is the average age of death (just as long as I get in my three score years and ten)! Some interesting conclusions when you consider tax and what you want to do when you retire.

    I don't think it changed my mind but it did highlight the cashflow of the different options.

  6. Pocoyo, you need to talk to your RAO immediately failing that the OTT SC.
  7. May have said this before.

    But I worked out howmuch it was worth with me dieing at 55, 65 and 75. Depending on rank and age of death i was between 30,000 and 100,000 better off with APS75.
  8. Thanks PM I have had a word, should get to see it next week sometime.
  9. Make yer mind up when they tell you how long you can stay in!
    Is VEng or a 37 year career gonna be open to us all?
    Read somewhere it will come in soon for all Regts and Corps and for new recruits.
    If you dont know how long they will let you serve how can you make your mind up!
  10. As an LSL WO2, with a med problem that could mean Med Discharge I cannot make an informed decision on the new scheme. Nobody can see into the future and quite frankly those in later service are being bullied into making ill informed decisions. The med side or finance are unable to tell me my possible grade of disablility which has an effect on how much I would receive. I have been on several so called OTT briefs and not one was the same or was able to answer delicate questions without blaming the government for the change. I have however done my maths on this very carefully and only if I serve to after 50 will I start to be better off in the new scheme. But only if I was definately going to be in to 55 and I would not get the 65 lump sum. But if I was to get out at 54 year point I would still get the 65 lump sum and be better off by 20000 up to and at the 65 year lump sum point.

    One has to look at the "If its not broke dont fix it thing" It is only changing because the government want to save money. The 65 age is a red herring to stop you thinking about what is beyond it. They know that most squaddies dont even live to that age now so they would save on the second lump sum.

    Being on the LSL does not mean an automatic right of work to 55. It comes in blocks of 5 years and one has to reenlist each time. At the end of a post they could say that service is no longer required and then what? If you have changed to the new system you will have lost out. My family would also rather have 50% of the old pension rate than 62% of the new one.

    Think carefully boys. If you know you are not going to serve to 55 stay with the old system. Check each year on the pensions calculator and do your maths and you will see. Look further than 65 and then make your decision.

  11. Warden. i've looked long and hard at this. One thing to remember for everyone is that if your terms of enlistment change between making the decision to transfer and leaving the forces ie:binned from LSL after only 1 stint, you can elect to go back on the old system. This obviously works both ways, I for one only have 3 years continuance so have not taken the OTT. If for some strange reason I decided to stay in and managed to get LSL(A) then i have the option to transfer as my terms of engagement will change. Hope this helps..oh, and I DO HAVE that in writing!