Why should British Servicemen Pay Tax on their Pensions

#1
I am an Army pensioner having served my 22 years service like many of you out there! I offset my pension against my Tax Allowance, but then anything I earn from the work I now do is hammered by the taxman.

I have recently been told that US Service personnel dont pay any tax on their Service Pensions!

Can anyone confirm this fact and also how do we go about getting the same deal for our lads?
 
#2
It gets worse, my last pension pay rise meant the tax kicked in more which gave me a £1 loss per month, I sh*t thee not.
 
#3
It is income-it is taxed. It is unearned income, be thankful for it-you have one of the best index linked pensins in the country. stop moaning.
 
#4
devexwarrior said:
It is income-it is taxed. It is unearned income, be thankful for it-you have one of the best index linked pensins in the country. stop moaning.
I take it you're not in line for one of these pitiful pensions then ? :D
 
#5
Bugly said:
devexwarrior said:
It is income-it is taxed. It is unearned income, be thankful for it-you have one of the best index linked pensins in the country. stop moaning.
I take it you're not in line for one of these pitiful pensions then ? :D
On the contrary I am in line for a 22 year pension in about 18 months time. I also contribute to a stand alond AVC and will undoubtedly have a second pension in my next career.

My point is that we as an employer group are no different from any other in terms of pensions. you could easily ask why miners, doctors or firemen pay tax. You receive about £7k free of tax a year. The rest you pay tax on-the NHS may have problems but it has to be funded from somewhere-your (and my 40%) tax rate.
 
#6
devexwarrior said:
It is income-it is taxed. It is unearned income, be thankful for it-you have one of the best index linked pensins in the country. stop moaning.
I agree with being taxed once, however as usual you are taxed again on what really should be a financial reward for many loyal years of service to the crown.
Do you really expect anything else from the government though?


fastmedic
 
#7
fastmedic said:
devexwarrior said:
It is income-it is taxed. It is unearned income, be thankful for it-you have one of the best index linked pensins in the country. stop moaning.
I agree with being taxed once, however as usual you are taxed again on what really should be a financial reward for many loyal years of service to the crown.
Do you really expect anything else from the government though?


fastmedic
agreed, but you are taxed on returns from other investments-what's different about a pension?
 
#8
devexwarrior said:
Bugly said:
devexwarrior said:
It is income-it is taxed. It is unearned income, be thankful for it-you have one of the best index linked pensins in the country. stop moaning.
I take it you're not in line for one of these pitiful pensions then ? :D
On the contrary I am in line for a 22 year pension in about 18 months time. I also contribute to a stand alond AVC and will undoubtedly have a second pension in my next career.

My point is that we as an employer group are no different from any other in terms of pensions. you could easily ask why miners, doctors or firemen pay tax. You receive about £7k free of tax a year. The rest you pay tax on-the NHS may have problems but it has to be funded from somewhere-your (and my 40%) tax rate.
Thank you for your input guys!

I understand that the government needs to tax the a**e off us ex-servicemen in order to pay for the vast amount of wasters in civi street, the great unwashed lazy sods and any other countries rejects who come here for financial reasons, none of which are to work and put anything back into the system!

The difference between us, the miners, doctors, firemen and the police is that they have union representation and can strike for better pay and conditions! We ex-servicemen and anyone currently serving know that we are or were the pawns for the government to send to the four corners of the earth to fight their battles with very little thanks!

Once you leave the service you are gone and forgotten, no matter what rank you were! The government knows statistically that many ex-servicemen never live to see the increases in pension on reaching 55 year of age (60 years of age for the preserved pension).

My original point was the US government dont tax their Military service pensions so why should we be taxed on ours? I dont mind paying tax on my second career but I certainly believe that we should not pay tax on our service pensions!

Maybe it would help with the current recruiting shortage if the government offered potential recruits better pay and conditions of service packages such as tax free service pensions?
 
#9
I think its just the state of this nation, our troops pay taxes on overseas deployment too, where our favourite friendly firing compatriots don't.

Simply put (and I don't believe I'm standing up for the bstrds) We don't have the population of the USA and in turn our Government don't have the tax pounds to afford a cut back on our service people, who go where we're told , when we're told, as often as we're told (with a bit of b1tching but we still get on with it)

If we weren't such a caring, sharing, open bordered, give it all out on a plate , free healthcare to all , even if you haven't put a flippin penny in born outside our borders , dss hand outs for all , even those who openly admit to hating the UK and its christian ways (Abu Hamza sorts) giving out our tax payers money hand of fist Nation, we MIGHT get some sort of tax relief on our pensions ... but its never going to happen. (the NHS might be in better condition too without spin doctors blaming it on managers etc)

I'm in the pension trap now , one of the few things keeping me in is hope of better things to come and... the pension at 22 (I've served 15 this sept) knowing its guaranteed income even if I fall on hard times and it gets better at 55 . My old mother after 40 years in the NHS and in management isn't on the same money that our pension turns into at 55, so the perks , taxed or untaxed are there.

Lets face it too, the way our boys and girls are pumped in and out of the sandy hell holes right now, not many stop in as far as 12 years so wont even have to worry about the half pension half the time, let alone the full 22... I don't think recruitments the problem Shiney, its keeping them in once thru training and having shipped them all over and sucked the life out of them .... different topic tho I think.

SB
 
#10
scaleybint said:
I think its just the state of this nation, our troops pay taxes on overseas deployment too, where our favourite friendly firing compatriots don't.

Simply put (and I don't believe I'm standing up for the bstrds) We don't have the population of the USA and in turn our Government don't have the tax pounds to afford a cut back on our service people, who go where we're told , when we're told, as often as we're told (with a bit of b1tching but we still get on with it)

If we weren't such a caring, sharing, open bordered, give it all out on a plate , free healthcare to all , even if you haven't put a flippin penny in born outside our borders , dss hand outs for all , even those who openly admit to hating the UK and its christian ways (Abu Hamza sorts) giving out our tax payers money hand of fist Nation, we MIGHT get some sort of tax relief on our pensions ... but its never going to happen. (the NHS might be in better condition too without spin doctors blaming it on managers etc)

I'm in the pension trap now , one of the few things keeping me in is hope of better things to come and... the pension at 22 (I've served 15 this sept) knowing its guaranteed income even if I fall on hard times and it gets better at 55 . My old mother after 40 years in the NHS and in management isn't on the same money that our pension turns into at 55, so the perks , taxed or untaxed are there.

Lets face it too, the way our boys and girls are pumped in and out of the sandy hell holes right now, not many stop in as far as 12 years so wont even have to worry about the half pension half the time, let alone the full 22... I don't think recruitments the problem Shiney, its keeping them in once thru training and having shipped them all over and sucked the life out of them .... different topic tho I think.

SB
Thank you Scaley

Certainly the boys and girls in todays forces are under a lot of pressure! I left in 96 and I cant imagine what they have to put up with in todays world? I just wish that the government would do more to make their lives better! God bless them all!
 
#11
With the greatest of respect, yes you do a fantastic job defending us "great unwashed wasters", however lets not forget that you don't just do it for the love of your fellow briton, you do get paid, quite well in comparison, for doing that job, which my taxes contribute to. So why, when you retire, why should you really also get a tax free pension when i do not? The small military pension i get is taxed and i am (fairly) happy to contibute to to the running of the country, (how the government spends it annoys me, but i digress).
 
#12
devexwarrior said:
-the NHS may have problems but it has to be funded from somewhere-your (and my 40%) tax rate.
The tax we pay is overwhelmingly used to fund welfare benefits. This includes Gordon's last NI hike that was to 'save the NHS'.

We spend nearly as much on benefits as on health and education combined.

After benefits, the largest item of expenditure is running the government. You don't think Prescott's Caribbean trip was done on air miles do you? Tony's farewell world tour is costing us a million quid.

Health comes a poor third. I think we still don't spend the European average on health.
 
#13
Oneshot said:
With the greatest of respect, yes you do a fantastic job defending us "great unwashed wasters", however lets not forget that you don't just do it for the love of your fellow briton, you do get paid, quite well in comparison, for doing that job, which my taxes contribute to. So why, when you retire, why should you really also get a tax free pension when i do not? The small military pension i get is taxed and i am (fairly) happy to contibute to to the running of the country, (how the government spends it annoys me, but i digress).
Thank you for the reply Oneshot! I believe all ex service personnel should receive tax free pensions! The "do and die" attitude should not come into the debate! We all deserve better! There are many ex-servicemen living on the streets because they cant adjust to civilian life, nor can they afford a mortgage or rent because they are unable to find suitable employment. Sorry but I feel that the Government should do more!
 
#14
Shineyarse said:
Oneshot said:
With the greatest of respect, yes you do a fantastic job defending us "great unwashed wasters", however lets not forget that you don't just do it for the love of your fellow briton, you do get paid, quite well in comparison, for doing that job, which my taxes contribute to. So why, when you retire, why should you really also get a tax free pension when i do not? The small military pension i get is taxed and i am (fairly) happy to contibute to to the running of the country, (how the government spends it annoys me, but i digress).
Thank you for the reply Oneshot! I believe all ex service personnel should receive tax free pensions! The "do and die" attitude should not come into the debate! We all deserve better! There are many ex-servicemen living on the streets because they cant adjust to civilian life, nor can they afford a mortgage or rent because they are unable to find suitable employment. Sorry but I feel that the Government should do more!
I think these are two seperate issues. Your right that more needs to be done to help servicepeople when they transition back from (every) conflict and again when they transition from military to civvie life.

However, this is not the same issue as a tax free pension, which i wold be against, unless ALL pensions were not taxed
 
#15
Shineyarse said:
The difference between us, the miners, doctors, firemen and the police is that they have union representation and can strike for better pay and conditions! We ex-servicemen and anyone currently serving know that we are or were the pawns for the government to send to the four corners of the earth to fight their battles with very little thanks!
Excuse me?

Fundamentally there is no difference between your employment as a soldier and, for example, a nurse's employment as a provider of healthcare.

You would both have paid into a pension scheme where the payees funded the recipients (i.e, it was not a money-pot investment system). The income that arises from that is taxed, like all other income.

Why should your pension be different than any other public servant's? Because you might have once been shot at? Well, you knew that when you joined, and I suspect you never complained about X-factor, either.

As for trade unions... What difference does that make? Even within this present system doctors, nurses, and others are not always entitled to strike. When was the last time you went to hospital and got turned away because we were on strike?

A more productive argument might be to increase one's pension payments. To try and suggest you are part of some moral elite that should somehow uniquely avoid tax is distasteful however.
 
#16
Friendly_Fire said:
[
Excuse me?

Fundamentally there is no difference between your employment as a soldier and, for example, a nurse's employment as a provider of healthcare.

You would both have paid into a pension scheme where the payees funded the recipients (i.e, it was not a money-pot investment system). The income that arises from that is taxed, like all other income.

Why should your pension be different than any other public servant's? Because you might have once been shot at? Well, you knew that when you joined, and I suspect you never complained about X-factor, either.

As for trade unions... What difference does that make? Even within this present system doctors, nurses, and others are not always entitled to strike. When was the last time you went to hospital and got turned away because we were on strike?

A more productive argument might be to increase one's pension payments. To try and suggest you are part of some moral elite that should somehow uniquely avoid tax is distasteful however.
Thank you for your comments Friendly_Fire.

First of all, I do not class myself as " part of some moral elite", if you read my other posts on this topic then you would see that I dont mind paying tax on my second income!

The aim of starting this topic was to gain the reactions of the forum towards the idea of british service pensions being paid tax free the same as the US service pensions!

Obviously it hits a nerve with some people and I appreciate the input.

I also appreciate what the other public servants do but I would let them fight their own battles! I am more concerned about the current serving and ex members of the Armed forces!

I am sure that there are more people out there who would support my idea than are against it! I guess I would not see you offering to pay more tax if you could avoid it, so who is being "part of some moral elite" now?

All comments are appreciated thank you once again :D
 
#17
Having only just started to receive my pension I have to say that the old adage of death and taxes is true. TACOS of service are pretty clear so it's not as if I wasn't expecting to pay any tax - I do begrudge it but I knew it was going to happen. I am still trying desperately to convince my new friends in civvy street that my pension isn't free!

Comparisons with the US are always slightly dodgy, yes they often don't pay tax in certain situations but their pay (relatively) is much poorer than ours - certainly up until 18 months ago Cpls in their army were financially below the poverty line in America.

Look at it this way - if Gordon didn't take it from our pension he would certainly find another way to get at it!
 
#18
Take professional Financial Advice on this one but there is the possibility that if you can afford to and you are in the 40% tax bracket, that you can stick a little on the tax man by paying AVCs and reclaiming the tax. That way at least some or perhaps all of your pension can be 'Tax Free' and you will be building up more pension for the future.
 
#19
Don't forget that you don't have pension contributions taken out of your pay and you can get a bloody good pension after 22 years - most people have to work 30 or 40 years to get anything equivalent.

If you went in to an independent financial advisor and said you wanted what is essentially a final salary scheme that paid out when you were forty, was index linked, and then gave bigger payments when you were 60 plus, they'd just laugh and say it couldn't be done unless you wanted to put half your weeks pay into it.
 
#20
Oneshot said:
With the greatest of respect, yes you do a fantastic job defending us "great unwashed wasters", however lets not forget that you don't just do it for the love of your fellow briton, you do get paid, quite well in comparison, for doing that job, which my taxes contribute to. So why, when you retire, why should you really also get a tax free pension when i do not? The small military pension i get is taxed and i am (fairly) happy to contibute to to the running of the country, (how the government spends it annoys me, but i digress).
We pay Tax too whilst out of the country
I think we still pay Council tax too whilst I dont use any council facilities whilst away.
NI but havent used the NHS for nearly 16 years, if our wages are so great how come Pte soldiers have to claim income support or whatever its called now. (And in comparison to who?)
Our pension comes out of our wages which we have paid tax for anyway, so why not have it tax free.