Discussion in 'Army Pay, Claims & JPA' started by bensonby, Oct 29, 2008.

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  1. I've been reading up on pensions as I didn't really understand my pension scheme (I'm not military - but it affects us all I guess) and according to the website pensions are a taxable income (news to me, but I'm not surprised)....

    But surely the contribution that I have to pay for my scheme (9.5%) are already taxed as I pay them? (i.e. the 9.5% are deducted after tax - when I tried to use an indicative online tax calculator, that was the impression given at least, see here for an example...NB.That's just a nice round figure, not the amount I earn)

    Have I made a mistake of understanding here? Or are we really taxed twice on our pension!? If we are, then surely there is a way to claim it back?
  2. oldbaldy

    oldbaldy LE Moderator Good Egg (charities)
    1. Battlefield Tours

    No. When your pensions contribution is deducted from salary you pay tax on the remaining, net, salary. Therefore giving you tax relief on your contribution.
  3. ah, my 9.5% somes out of the gross amount. Cheers. Was tying myself in knots getting mightily confused...
  4. oldbaldy

    oldbaldy LE Moderator Good Egg (charities)
    1. Battlefield Tours

    That's correct & you then pay tax on the remaining 90.5%.
    Anyone paying in a personal pension pays a net amount & the pensions company grosses that up by claiming tax relief on the payment.
    In simple terms if you make a payment of £80 per month, £100 is paid into your pensions fund.
  5. Basic Military Pensions, along with Civil Service and Local Government, and State Pensions will probably go up by around 5 Per Cent come April/May 2009. The increase is based on the rate of inlfation calculated from September. In september this year, 2008, official inlation rate was around 5% so it is understood.

    The Forces Pensions Society also suggests that Forces Pension will go up by around 5 Per Cent.