Index linked pension.

Discussion in 'Diamond Lil's' started by SELJUK, Aug 9, 2007.

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  1. I've heard it said loads of times during my service and now I'm four years away from it I'd like to see it explained again.
    When I reach fifty five....lord help me; in four years time; do Centurion get in touch with me about the changes or do I have to write to them and advise them that I'm still around and whatnot.

    An indexed linked pension, what sort of figure can I expect to see monthly for a killick sailor whose done 22 years?

    I would like to be one of these :farao: but I expect I'll have to keep doing this :pottytrain5:
  2. Go to the government web site which records all the annual inflation figures.

    Add them all together from the year you left untill now. and that should give you a ball park figure of how much your pension will increased.

    It can be substancial (BIG) if there has been a lot of inflation since you left.

    I left at 50 in 2000, and my increase was about 6%, because inflation had been low from 2000 to 2005.

    Hope this helps. It is not as much as you may think. However 15 years is a long time...

    Just enjoy it when you get it you have earnt it buddy.

    Edited to add.

    The pensions agency will be in contact with you, about a month before your 55th birthday, followed by a letter from the TAX man to tell you how much he is going to take :pukel: :pukel: :pukel:
  3. It will increase automatically when you are 55 as a general rule, which it has been so for many years, it will almost treble, thats if you left at forty.
    It`s worked on on the RPI, hope this helps, It`s a rise well worth having believe me.
  4. chieftiff

    chieftiff War Hero Moderator

    And the RPI has been running at a rate significantly higher than inflation (CPI) for a few years now, last years rates were CPI 2.4% on which they based our wopping 3.3 % pay rise versus an RPI of about 4% (the real cost of living increase including mortgage rate etc) Would be interesting to see if pensions increase with RPI or RPIX (RPI not including mortgage interest rate change)
  5. The crafty barstewards use 12 x oct inflation rate usualy the lowest monthly inflation rate. At least they do for the NHS pension 25 years on my dads pension has dwindled every year :threaten: in relation to the"real" annual rate since they change the system.
  6. chieftiff

    chieftiff War Hero Moderator

    I've just read through the AFPRB report for 2006 (this years pay rise) and it seems to suggest that pensions are based on the RPI rate for June, which is good, I think. It also reminded me of this little gem which I found in the report at the time which suggests a good payrise next year (yeh right)

    “Armed forces personnel have a non-contributory pension scheme…………. We periodically value military pensions against civilian pensions so that we can take a value expressed as a percentage………… we do not add this value to service pay but deduct it from civilian comparator pay…….. our last valuation was carried out in 2001 when we concluded that the comparative advantage of military pension over civilian comparator was 7% and we have used this figure in our pay comparability assessment each year.â€

    Leap forward a couple of pages with lots of justification as to how and why this was re-evaluated and you arrive at this gem:

    “The value should be 4%†(It’s actually 3.7% for other ranks) But……………… The value will be deducted from the civilian comparisons from 1st April 2007, which will form part of our 2008 report.â€
  7. The 2007 pay rise was [from April ] 3.6% for RN pensioners .
    2006 was 2.7 % it goes up and down like the yo-yo!! lowest I have was year 2000 --1.7%

    I get a NHS pension as well and it is linked as above --same percentages.

    At age 55 you also stop payments for any part of your pension that you commuted on release so the pension will reflect that aswell. Its all done automatically --same as my release from the reserves letter :w00t:

    At age 65 they do another calculation because you recieve the OAP but not sure how it works cos the pension hardly changed.

    Watch out for the taxman-----if you work on PAYE your pension is taxed at base rate .

    :nemo: :nemo:
  8. chieftiff

    chieftiff War Hero Moderator

    As well as being taxed at source is the national insurance contribution taken out as well?
  9. There's no reference on the P.60 from Paymaster about NI --I think its classed as unearned income and your work earnings are graded to NI contributions.

    You need to work for 44 years to earn the full OAP with NI contributions.
    OAP then is backed up by the additional payments earned from SERP percentages reflected in NI during the 44 years .

    I retired at 63 and was told I didn't need any stamp or requirement to sign on the 'dole' for job seekers!!!!

    :nemo: :nemo:
  10. When I recieved my OAP, the good news was that I paid no tax on it..the bad news is that they abated my other two Government pensions by the amount I would have paid if the OAP was taxed.....confused>>>>>????
    Although pensions paid by the government are increased generally in April they are indeed based on the inflation rate of the previous October.
    For government pensions read Service/Civil Service/NHS etc.,
  11. when you reach 65 there is a reduction in your Navy pension, not certain of the rules but mine was about £20 per year, although they say that your old age pension is not taxed, you are taxed on anything above your allowance, regardless, and thanks to this Government as of April my tax will increase because they have got rid of the 10% bit, makes you proud to be British. hope this helps.
  12. Tax for pensioners----

    Your personal allowance at age 65 is almost the same as your OAP income
    hence no tax payable. On the other gov pensions [not RN ] they are added to your oap income so combined they give a ---minus figure for tax
    numbering [ie amount above the personal allowance tax free amount.]

    the tax owing is then applied to your RN pension :toilet: :toilet:

    :nemo: :nemo:
  13. It doesn`t matter which way you cut it, everything above your allowance is taxed.
  14. When I left the RN in 1975, my Chief's pension was £1286.00 per annum, and for the first two years it was taxed at 35%, reducing gradually to 30% by 1980, where it stuck till 1986, when the decrease to the current rates started.
    It almost quadrupled when I reached 55 (due to high inflation in the intervening years - anyone remember 20% pay increases?)
    Its crept up slowly since, and as Hig posted, is reduced by coppers per week when you reach 65.
    HOWEVER - also when you reach 65 your personal tax allowance goes up to £7550 (current figure), and if your State pension is more than this (as is mine), then they add the difference (theoretically) to your Naval pension so that you can pay tax on it. They then give you a K prefix to your tax code. There is no escape - they've got you by the short & curlies whichever way you turn.
    So the State pension IS taxable, but DWP, having no mechanism to collect the tax, pass it on to a department that CAN collect it.

  15. Well 55 is coming up in a couple of months. Any one else got there this year, after 22years service, any clue as to how much it goes up, %, now the commutation period is coming to an end? Looked through the Gov/Mod web sites and for all the sense they make they could be in Manderin

  16. I yr to go for me , so will be interesting to see what you get as mine will be similar
  17. 10 months before I hit 55 so I've got an interest in this although I did 33 so I don't know what the difference (if any) will be.

    Keep us posted as I have no idea about this pensh/tax stuff.

  18. It doesn't just go up but any sacrifice in the pension ammount that you made by converting it to cash (ratings) is reinstated.
    Look forward to it I think my pension doubled.
  19. Topstop

    Have you tried running this past the SPVA on 0800 169 2277? They should be able to tell you.
  20. Mine went up about 2 1/2 times. I commuted when I left. This was last year when i reached 55 yrs and getting younger.

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