Pension taxed

[cbgramc]

I put this in the NAAFI so I can say what I think in an eloquent manor. I got my Arny pension P60 telling me at 55 i will get this year inflation rise 3.9%, great something to look forward to, my wife then points out this year my pension will go down by £16 a month not much in the big scheme of thing but a deduction none the less.

So HMG can kiss my big, fat, hairy, spotty Scottish ARRSE at this rate by the time I'm 55 I will be paying them, they are talking about not giving prisoners in jail a pay rise fu@k them give me back my 10% tax rate on my sad little Army pension you C,nts

 

[oscar1whisky]

I put this in the NAAFI so I can say what I think in an eloquent manor. I got my Arny pension P60 telling me at 55 i will get this year inflation rise 3.9%, great something to look forward to, my wife then points out this year my pension will go down by £16 a month not much in the big scheme of thing but a deduction none the less.

So HMG can kiss my big, fat, hairy, spotty Scottish ARRSE at this rate by the time I'm 55 I will be paying them, they are talking about not giving prisoners in jail a pay rise fu@k them give me back my 10% tax rate on my sad little Army pension you C,nts

what he said...

 

[right-grumpy]

cbgramc, not to late for you to get a "job" as an MP, it is the ONLY way to get anything of of the fukin system the cnunts have created!

No sorry there is another but Scotish or not you are not going to get Immigrant status.

 

[whosthedaddy]

cbg, are you just hitting the 55 year point? If so then surely you will be getting much more than the 3.9% rise??? At 55 will you not be getting backdated index linked rises for the past 15 years? That's what i've always been led to believe, that the index linking that you've missed out on for the previous 15 years is backdated, so in effect your pension should rise 15 times in one leap? That works out at a rather BIG increase in your pension.

When I have attempted to model this using what is my projected pension of £12000, multiplying that by 1.03 (For an estimated 3 % inflation per year) 15 times for the 15 years worth of backdating, the pension ends up being in the region of £18.5k at 55.

 

[Sparks_Fly]

wtd. AFAIK the index linking is not backdated so in effect you lose money equal to the rate of inflation every year up to the 55 year point then it is index linked and increases inline with inflation

 

[chris951]

wtd. AFAIK the index linking is not backdated so in effect you lose money equal to the rate of inflation every year up to the 55 year point then it is index linked and increases inline with inflation

Thanfully you are wrong! This is taken from the AFPS 75 booklet (Page 13):

IMMEDIATE PENSION (IP)

If you complete a minimum of 16 years from age
21 (or date of entry if later) (Officers) or 22 years
from age 18 (or date of entry if later) (Other
Ranks), you will be entitled to an IP. This pension
will be fixed until you reach the age of 55. At this
point it will be increased to take account of the
total rise in the cost of living since your service
ended and will continue to increase in line with
annual movements in the Retail Price Index. This is
known as index-linking and means that your
pension keeps its purchasing power over time.

Note the bolded bit!

 

[Sparks_Fly]

edited: double posted

 

[Sparks_Fly]

You've made my day! Although in effect I will be taking a hit every year untill I'm 55.

 

[thebutlerdidit]

cbg, are you just hitting the 55 year point? If so then surely you will be getting much more than the 3.9% rise??? At 55 will you not be getting backdated index linked rises for the past 15 years? That's what i've always been led to believe, that the index linking that you've missed out on for the previous 15 years is backdated, so in effect your pension should rise 15 times in one leap? That works out at a rather BIG increase in your pension.

When I have attempted to model this using what is my projected pension of £12000, multiplying that by 1.03 (For an estimated 3 % inflation per year) 15 times for the 15 years worth of backdating, the pension ends up being in the region of £18.5k at 55.

I hope they use your maths when they calculate my pension rise at 55, it isnt my strong point but 15 * 1.03 = 15.45. %15.45 of £12000 is an extra £1854 per year, giving you a pension rise to £ 13854, feel free to correct me if I am wrong. Your original calculations give an increase of around 40%, unless of course inflation increases.

 

[Xenophon]

cbg, are you just hitting the 55 year point? If so then surely you will be getting much more than the 3.9% rise??? At 55 will you not be getting backdated index linked rises for the past 15 years? That's what i've always been led to believe, that the index linking that you've missed out on for the previous 15 years is backdated, so in effect your pension should rise 15 times in one leap? That works out at a rather BIG increase in your pension.

When I have attempted to model this using what is my projected pension of £12000, multiplying that by 1.03 (For an estimated 3 % inflation per year) 15 times for the 15 years worth of backdating, the pension ends up being in the region of £18.5k at 55.

I hope they use your maths when they calculate my pension rise at 55, it isnt my strong point but 15 * 1.03 = 15.45. %15.45 of £12000 is an extra £1854 per year, giving you a pension rise to £ 13854, feel free to correct me if I am wrong. Your original calculations give an increase of around 40%, unless of course inflation increases.

You are wrong and daddy is right. The detail may not be exactly correct since it assumes 3% inflation every year. In principle you calculate the uprated pension the same way you calculate compound interest.

 

[chris951]

cbg, are you just hitting the 55 year point? If so then surely you will be getting much more than the 3.9% rise??? At 55 will you not be getting backdated index linked rises for the past 15 years? That's what i've always been led to believe, that the index linking that you've missed out on for the previous 15 years is backdated, so in effect your pension should rise 15 times in one leap? That works out at a rather BIG increase in your pension.

When I have attempted to model this using what is my projected pension of £12000, multiplying that by 1.03 (For an estimated 3 % inflation per year) 15 times for the 15 years worth of backdating, the pension ends up being in the region of £18.5k at 55.

I hope they use your maths when they calculate my pension rise at 55, it isnt my strong point but 15 * 1.03 = 15.45. %15.45 of £12000 is an extra £1854 per year, giving you a pension rise to £ 13854, feel free to correct me if I am wrong. Your original calculations give an increase of around 40%, unless of course inflation increases.

thebutlerdidit - you have got it slightly wrong. The 1.03 figure quoted by whosthedaddy is not a percentage. Also, remember that the year on year percentage increases are cumulative (compounded?):

so if you retire on a £12,000 pension then that pension would be worth £12,360 after 1 year (at 3% RPI) and £12,730 after 2 years and so on up to approx £18,150 after 15 years.

I did create a spreadsheet which models this at a very rough level, I can let you have a copy as long as you promise not to sue me if it's wrong!

 

[whosthedaddy]

Xenophone,

thanks for the confirmation. Like I said in the original post, I am ASSUMING a 3% rise each year. This could well be higher or lower for each year, but in principal the figures are sound. It would be entirely unfair to simply times the common rate by 15 to give a lump sum rise, as that would negate the rise. The Compound Interest theory stands, that the rises will be in line with the inflation for each seperate year, ergo 1.03 (or whatever) for all 15 years.

It gets better, if you are really bored, try it up until the 65 year point and add roughly £5000 (for the state pension to which you are also entitled). I get to around £32000 a year, as a 65 year old. Not bad that compared to the average pensioner.

Edit. PS, Butler, go straight to the bottom of the class in maths mate!

 

[chris951]

Like I said in the original post, I am ASSUMING a 3% rise each year.

Which isn't too bad as the AVERAGE RPI over the last 15 years is around the 2.78% mark. (1991 was a good'un with an RPI of 10.9% for pension purposes!)

RPI figures for pension calculations can be found here.

 

[thebutlerdidit]

Told you I was no good at maths and I will be pleased to take the hike when I get to 55!

Was already at the bottom of the class, failed EPC maths 1st time!

 

[cbgramc]

No I still have ten years (if I last that long) until i get the index linked pension, thank for the spread sheets , calculation etc the point is this year my pension has been cut by around £16 a month because of the change to the tax laws.

As I said this is in the NAAFI for a reason that reason is statistically at 55 there is a high likelihood that I will have popped my clogs and they can give me 100% a year for 15 years i will still be brown bread, this year the dirty scheming backsliding B@stardes have taken £16 off me, so for 24 years 20 days hard service for Queen and country they can fu@k me around.

Give the druggie more methadone, the prisoners a pay rise and don't forget the black, single mother, lesbian, disabled, catholic, unemployable drug abusing, counsel house cue jumping immigrant tw@ts an extra few quid on me.

 

[comedy dave]

Isn't the Army Pension non-contributable? I have to pay 6% out of my wages.


Isn't it index linked too?

Anyway my pension is frozen till I'm 60 years old..... so I'm not worrying just yet

 

[Whiskybreath]

No I still have ten years (if I last that long) until i get the index linked pension, thank for the spread sheets , calculation etc the point is this year my pension has been cut by around £16 a month because of the change to the tax laws.

As I said this is in the NAAFI for a reason that reason is statistically at 55 there is a high likelihood that I will have popped my clogs and they can give me 100% a year for 15 years i will still be brown bread, this year the dirty scheming backsliding B@stardes have taken £16 off me, so for 24 years 20 days hard service for Queen and country they can fu@k me around.

Give the druggie more methadone, the prisoners a pay rise and don't forget the black, single mother, lesbian, disabled, catholic, unemployable drug abusing, counsel house cue jumping immigrant tw@ts an extra few quid on me.

You're worrying overmuch. I made it to 55 last year (and those who know me know how statistically improbable that was) and the sum total of my pension is still contemptably tiny. Soldier on.

 

[cbgramc]

The non contributory part was taken out in the x-factor so yes it did not show on your pay slip but we did contribute, it is index linked but not payable until you are 55 only the % rise is added to your pension and the actual money is not back dated. The point is it was my terms and condition so was part of my employment contract, the goverment has found a way to effectively cut my actual in the bank amount by removing thr 10% tax rate, so they can fu@k off

 

[chieftiff]

Xenophone,

thanks for the confirmation. Like I said in the original post, I am ASSUMING a 3% rise each year. This could well be higher or lower for each year, but in principal the figures are sound. It would be entirely unfair to simply times the common rate by 15 to give a lump sum rise, as that would negate the rise. The Compound Interest theory stands, that the rises will be in line with the inflation for each seperate year, ergo 1.03 (or whatever) for all 15 years.

It gets better, if you are really bored, try it up until the 65 year point and add roughly £5000 (for the state pension to which you are also entitled). I get to around £32000 a year, as a 65 year old. Not bad that compared to the average pensioner.

Edit. PS, Butler, go straight to the bottom of the class in maths mate!

It's all interesting stuff, and doesn't it sound good until you consider a few things like: the RPI calculation is taken at the mid year rate (traditionally the lowest point in the year for some bizarre sociological reasons) and the actual value of your money in real terms is decreasing all the time so.... it's very likely (because your pension has increased broadly in line with the cost of living) that your pension at 55 will buy exactly the same amount of stuff as your pension did after your 22.

Of course when you leave you could start investing in a new pension say 6% of your wage and then with tax relief (don't forget to claim back the extra contributions if you are a high rate taxpayer by self asessment) and employers contributions definitely be able to retire at 55............ for good. (and take another gratuity of up to 25% of your new pension, tax rules dependent) just check that you have made all of your NI contributions to ensure your full (minimum) state pension at state retirement age.

Just got to make sure you live!!

 

[cbgramc]

Xenophone,

thanks for the confirmation. Like I said in the original post, I am ASSUMING a 3% rise each year. This could well be higher or lower for each year, but in principal the figures are sound. It would be entirely unfair to simply times the common rate by 15 to give a lump sum rise, as that would negate the rise. The Compound Interest theory stands, that the rises will be in line with the inflation for each seperate year, ergo 1.03 (or whatever) for all 15 years.

It gets better, if you are really bored, try it up until the 65 year point and add roughly £5000 (for the state pension to which you are also entitled). I get to around £32000 a year, as a 65 year old. Not bad that compared to the average pensioner.

Edit. PS, Butler, go straight to the bottom of the class in maths mate!

It's all interesting stuff, and doesn't it sound good until you consider a few things like: the RPI calculation is taken at the mid year rate (traditionally the lowest point in the year for some bizarre sociological reasons) and the actual value of your money in real terms is decreasing all the time so.... it's very likely (because your pension has increased broadly in line with the cost of living) that your pension at 55 will buy exactly the same amount of stuff as your pension did after your 22.

Of course when you leave you could start investing in a new pension say 6% of your wage and then with tax relief (don't forget to claim back the extra contributions if you are a high rate taxpayer by self asessment) and employers contributions definitely be able to retire at 55............ for good. (and take another gratuity of up to 25% of your new pension, tax rules dependent) just check that you have made all of your NI contributions to ensure your full (minimum) state pension at state retirement age.

Just got to make sure you live!!

Thanks for all that but just give me my £16 back, if I was on the upper tax limit yep I would do that but the only self assessment I do is in the shower all I want is Mr Brown to admit he is a cvnt and give me my £16 back