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What is the new pention all about then??

#2
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.
 
#5
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?
 
#6
Sytoon said:
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.
 
#7
Sytoon said:
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.

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.
 
#8
nosweat said:
Sytoon said:
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.

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.
 
#9
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.
 
#10
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.
 
#11
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.
 
#14
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.

http://www.unbiased.co.uk/

Thats the web adress for the IFAP. A promo group for Independant Financial Advisors.
 
#15
BiscuitsAB said:
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 balls 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.

http://www.unbiased.co.uk/

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) :wink:
 
#16
I have to say that I disagree with your view Paymaster. Having run the pensions calculator for every year between my IPP and my end of service, I am worse off in the long term in every single year if I transfer. To the tune of 70,000 in the worst year.

How can it be better for me as a pension when the stated aim of switching to the new scheme is to allow better benefits on the compensation scheme?

As the change is cost neutral overall, and extra money is being paid in one area (compensation), it must be being taken from somewhere. I wonder where?

There will be a small minority of people who will change, the rest would be right to stay put.

Smoke and mirrors - a good job that the pension is usually the last thing on a recruits mind. However, its utility as a retention tool of those hovering at the age of 30/32 (soldier and officer) cannot be underestimated. I suspect we will only see the real impact of this in 12-14 years time when everyone will have forgotten why it used to be easy to retain enough of this age group.

Gordon Brown and his esteemed predecessors have never 'given' me money while I've been an adult, they've only schemed how to relieve me of it........
 
#18
Bagpuss you are right of course, BUT there are a few people for whom the AFPS05 is a good deal (eg QM Lt Col who joined as a boy soldier and is going out at 55) ...... and those improvements did have to be paid for by the rest of you.
 
#19
Dear All,

Having put in all my details into the calculator, it is apparrent that the new scheme is a complete rip off for those who do not serve up to the age of 55. I have imput all permutaions up to run out date at 55th birthday and only then will it be a winner. However.......Should I go onto the new system at 44 and live to reach 65....... I will have lost out by 51000 pounds. I have researched and reentered and still come up with the same figure when filling in the easy details. At the same time......If I was to go on the new system and then die before 55.........My wife would only get 60% of the pension I was on at time of death, which would be lower by 40% before my 55th BDay. She would be better off with 50% of the APS 75 pension rate. So if you are not going on the LSL........WATCH OUT..............WATCH OUT...............Soldiers will fall when hit.

The new system is pulling on the heart strings of the families we so love. I think it is a disgrace that we are being duped into this with bad briefings by people who have not done their homework or are on the MOD payrole like the General who visited us was.The extra money at 65 is what you would get in pension up to 65 on the old system. People cannot seriously believe the MOD would offer something and not gain out of it themselves. Thy hop everyone will die before 65 and they will save a fortune. Those lucky enough to get LSL will only be better off by a couple of grand per year pension and a couple of grand more gratuity at 55........Thy do not get the second gratuity at 65.

Think wisely ladies and gents. The new system is not that which it seems, or that you are being duped into believing.

Check it out for yourselves at

www.mod.uk/pensions/issues

Follow the simple questions and crack on........check at least every 5 years as a run out date to gain an overview.
 
#20
Dear All,

Having put in all my details into the calculator, it is apparrent that the new scheme is a complete rip off for those who do not serve up to the age of 55. I have imput all permutaions up to run out date at 55th birthday and only then will it be a winner. However.......Should I go onto the new system at 44 and live to reach 65....... I will have lost out by 51000 pounds. I have researched and reentered and still come up with the same figure when filling in the easy details. At the same time......If I was to go on the new system and then die before 55.........My wife would only get 60% of the pension I was on at time of death, which would be lower by 40% before my 55th BDay. She would be better off with 50% of the APS 75 pension rate. So if you are not going on the LSL........WATCH OUT..............WATCH OUT...............Soldiers will fall when hit.

The new system is pulling on the heart strings of the families we so love. I think it is a disgrace that we are being duped into this with bad briefings by people who have not done their homework or are on the MOD payrole like the General who visited us was.The extra money at 65 is what you would get in pension up to 65 on the old system. People cannot seriously believe the MOD would offer something and not gain out of it themselves. Thy hop everyone will die before 65 and they will save a fortune. Those lucky enough to get LSL will only be better off by a couple of grand per year pension and a couple of grand more gratuity at 55........Thy do not get the second gratuity at 65.

Think wisely ladies and gents. The new system is not that which it seems, or that you are being duped into believing.

Check it out for yourselves at

www.mod.uk/pensions/issues

Follow the simple questions and crack on........check at least every 5 years as a run out date to gain an overview.
 

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