Discussion in 'Finance, Property, Law' started by Sytoon, May 31, 2005.
The heart of the site is the forum area, including:
Just that, whats it all about?
If you intend to join the Army - or the RAF or the RN for that matter - in the future, you won't actually receive a pension after 22 years service. The old pension scheme with the 22 years for pension feature is now closed to new recruits and anyone who joins or has joined after 5 April this year is a member of the new AFPS 05 scheme.
The terms are a bit more complex than the old scheme. The main thing that will interest you is that if someone leaves before age 55, they will receive their pension at age 65 and if they have served for 18 or more years are 40 years of age or over (and younger than 55), they will be entitled to an Early Departure Payment (or EDP) payable until they are 65.
Pension will be pased soley on the individual's final salary as oposed to the representative pay rates system of the old scheme.
The new scheme and EDP are complex and not something that is easy to explain in a few words. I suggest you read the details that are available on the 05 scheme on the MOD website at www.mod.uk/issues/pensions/
Hope his helps.
Do you mean pentium processor?
That text looks very familair, Mr Poet
Thanks for the help that makes it a bit easyer to get my head around. So if you are already in we have to make diside which one to have or do we just stay on the old one?
Sorry to be **** but:
easier, not easyer
pension, not pention
decide, not diside
Apart from that, avoid the new scheme if you have the choice as it has removed the instant pension option if complete 16 yrs but leave before 25.
Never forget, changes like this do not happen for the benefit of those serving, only for the good of the treasury.
Keep working on the spelling.
Please be careful saying things like that. It can be perceived as you giving financial advice, and unless you are a qualified IFA, you are not permitted to give advice on financial matters.
If you serving on the same unbroken period of service on 5 April 05 and 5 April 06, you will recieve an Offer to Transfer to the new scheme. You will recieve booklets explainnig the 05 scheme in some detail and you should have received the old scheme booklet a couple of years back. Once you have recieved your comparison statement, you will have three months to digest the information, take any independant financial advice you may need and then make your mind up on which scheme you wish to be a member of.
It is one of the biggest financial decisions you are ever likely to make, so make sure you don't rush into anything.
Nosweat - this is a forum for discussion, opinion and the like. I am not an IFA but since when has a Govt ever changed anything for the financial benefit of the military?
I have read the booklet in some detail and for Officers, the instant pension is gone in the new scheme - FACT.
Therefore, the only benefit is a tiny percentage bigger at end of career.
That to me is not a good deal unless you are sure you will do the full term (25yrs), otherwise you have no golden parachute / early release pension.
That is my opinion - take it or leave it but it is based on the facts.
The 16 year pension is gone because it does not comply with Inland Revenue regulations, which state than a pension cannot be paid before age 55. In its place is the Early Departure Payment - something that is not a pension benefit (cannot be affected by divorce is the big advantage of this) and the IR have allowed due to the nature the career offered in the Armed Forces.
The new scheme can make a reasonable difference to some people - mainly doctors and dentists) and I know some people who are planning to leave when they are 54 and a half in order to receive two lump sums.
So it works for some and not for others.
In fact if you really work out the the figures, AFPS75 vs AFPS05 in the long run you get around the same amount of cash in total, its just that in AFPS05 you have to wait a long time to get hold of it. That for some people is ok, good job in civy land might mean no need for the IP (Immediate Pension) and not extra money on tax and of course the need to live to 65+ to collect on the total package.
This question has now been asked in the House of Lords. Government's answer to follow when available.
House of Lords source
MOD Press Notice 21 Jun 05 - New Redundancy Package for Members of the Armed Forces
Hansard text now available at http://www.arrse.co.uk/cpgn2/Forums/viewtopic/p=317128.html#317128
With Ref to the comments about dont give advice if your not an IFA. The rule is if you give advice and get paid for it you need to be registered and authorised either directly or indirectly by the Financial Services Authority. Which is why the News papers can get away with writting some of the absolute bollocks that they do.
So if you take as gospel something you are told on here and take action on it, if it proves to be wrong. Tough, its your own fault in the eyes of the FSA.
So feel free to say what ever you want on here.
But if you want advice then find and advisor.
Thats the web adress for the IFAP. A promo group for Independant Financial Advisors.
1. Many financial journalists are actually registered with the FSA and have passed the relevant exams to provide advice. They do this so that they can be more specific in their articles and/or to help answer specific letters from individual readers. The entire financial press is monitored for abuse of this but I am sure that FSA will be grateful for any articles that you think contain misleading information.
2. ARRSE users are advised to treat with caution the information posted here by anyone other than Naafi Financial - as per my warning at the top of the board: http://www.arrse.co.uk/cpgn2/Forums/viewtopic/t=3301.html. This is also why I have specifically stated that I will not give financial advice but can provide generic information.
3. IFA Promotion (unbiased.co.uk) is an excellent organisation which will help you find a professional, independent adviser in your area. If you are not sure whether an adviser you have is independent then ask them (or check their business card or letter head) otherwise they may be tied to one or a handful of companies and only advise on a limited selection of products. This thread: http://www.arrse.co.uk/cpgn2/Forums/viewtopic/t=1214.html has more info.
Thanks Biscuits (two out of three 'aint bad)
Separate names with a comma.