Right, you need to separate out what they are telling you.
When you leave you will be getting a pension lump s
First, have a read of the article on lump sums in this magazine (P6-7 i believe) -
https://cloud.3dissue.com/6374/7271/15135/PathfinderMay2017/index.html
Vets Uk will have separated out what they are paying.
The AFPS 75 pension lump sum requires no decision from you but their question about commutation does. Do you want to give up some of your pension until age 55 to get a second lump sum? I take it that that is what the £14.500 is. They will have given you a figure to show what your pension will be reduced to until age 55. At age 55 it will be restored to its original level and pick up any CPI rises which have occurred since you left the Service
The next immediate question is 'do you want to keep your EDP lump sum or do you want to give it all back to them for a bigger EDP income until your state pension age?" They will have given you a figure to show you what the taxable increase in your EDP income will be.If you are thinking of doing this, have a chat with a financial adviser - a tax free lump sum is a valuable thing to part with.
The final question is 'at state pension age, do you want to give up some of your deferred AFPS 15 pension to generate a tax free lump sum?" Can't answer that for you, I am afraid and it may be that you think it a bad idea now and a good idea later (or the other way round). Not to worry. You can review your decision - our advice is to do it at least 6 months before you are due to claim your pension - and let Vets UK know. No work will have started on your AFPs 15 entitlement, so no one can complain.
From my reading of your post it looks to me as if you have been told you are getting a lump sum of 34.5K on exit and could have a further 14.5K if you commute. Total 49K. If you give up your EDp lump sum, obviously this figure will go down. You are also being told that you could get another lump sum of 12.5K at state pension age if you want to give up some AFPs 15 pension to generate it.
If you are a member of the Forces Pension Society you can send you statement to the team in Vauxhall and they will explain it all to you. email -
[email protected] If you are not a member and you want to know more about us, visit
www.forcespensionsociety.org