Pension Advice

Discussion in 'Finance & Pensions' started by stockfield, Jan 2, 2012.

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  1. I spent some time as a financial adviser.
    It is unlikely you have scope for free standing AVC's depends on your pay band.
    however as a late entrant you may have scope.
    Armed Forces Pension scheme and AVC's are complex clashing with Inland Revenue rules.
    Check at the pay office. Sadly it is doubtful they can give you an answer.
    I am baffled where my pension went. In the Armed Forces Pension booklet dated 1991. It states a certain date and claims if you served at least 2 years you are entitled to a pension at age 60. I applied was told not entitled. I served 9 years
  2. Your post falls into two parts. The first seems to be an answer to someone else's question on AVCs the latter an issue with your own pension entitlement.

    Looking at the AVC point first. Both AFPS 75 and AFPS 05 have provisions for AVCs. In AFPS 75 you can buy service if you joined late or had an unpaid gap in service. In AFPS 05, because the maximum reckonable service which may be counted is 40 yrs (and very, very few get that far) almost everyone has scope. The maximum you can contribute to the scheme by way of AVC premiums is 15% of pay. They can be expensive so you may wish to take advice from an independent financial adviser - there is a list on the MOD website of those who specialise in Armed Forces matters.

    Regarding your pension entitlement, it depends when you left. If you left after 1980 and have 2yrs reckonable service in the regular Armed Forces, and left the Armed Forces after April 1975 you should have a pension entitlement. Reckonable service in AFPS 75 is service from age 21 as an officer and age 18 as an other rank. The only exceptions I can think of are if you:

    - opted out;
    - transferred your accrued benefits out of AFPS 75 into another scheme; or
    - were on gratuity earning terms.

    If you left before April 1975 you would have no pension entitlement for 9 yrs service. If you left between those dates, let me know and I will tell you the rules.
  4. Quite right. Preserved pensions came in in 1975. Before that, if you didn't serve 22 yrs as an OR or 16 yrs as an officer, no pension was paid.
  5. What would be the case if the taxman claims that he wasn't told that a pension was awarded (and which would be taxed at 22%), and that a copy of this was sent to him by the Pension people (which the taxman states he was never told )?
    I claimed under the A19 objection which was rejected on the grounds that they had no record of being informed, even though I sent them a copy of the document ?!? :scratch:
    I wonder if I should have started a mobile phone company - could have been let off most probably ....... ! :censored:
  6. Your pension should be taxed at source. The only time you can ask for it to be transferred elsewhere to be taxed is if you emigrate to Canada, Australia, New Zealand or Southern Cyprus. I don't know how you slipped through the crack but, if tax is due and unpaid, the devils will certainly chase you for it.

    Sometimes people get a personal tax allowance on both their pension and their salary (instead of one OR the other) because they haven't told the taxman that they are working and are in receipt of a pension. It is the individual's responsibility to sort out where they want the personal allowance to sit. If two allowances have been given, a tax bill follows and I have only heard about one person who managed to wriggle out of it, and we, at FPS, were astonished he succeeded.
  7. I see the questions I wanted to ask on this are already here, something I don't quite understand. I reside in Canada and will start to receive my RN pension
    at 60 this summer, I've been told it's taxed at source therefore in the UK, can someone tell me what the percentage in tax I will pay.
    My bank advised me if it's taxed at the source then I don't have to claim it as income here in Canada, can someone confirm that for me please.
    Then someone else advised me that I don't have to have it taxed at source, because I live in Canada I can opt to have it taxed at this end.........again if anyone can confirm I would be grateful.
    Thanks in advance.
  8. It will be taxed in UK unless you ask for it to be transferred gross to Canada (Canada being one of the 4 countries to which an Armed Forces Pension can be sent gross). Even if you have it taxed in UK, you will have to declare it as income in Canada, although there is a double taxation agreement which means the whole lot will not be re-taxed.
  9. Sorry to thread-jack, can I buy AVCs for the period I served between 18 and 21 as an Officer on AFPS 75?
  10. So in your opinion should I just let it be taxed in the UK and have done with it ? if it's taxed in the UK it won't be taxed again here. Or depending on where it's cheapest to have it taxed I have the option to choose here or the UK, many thanks
    thats interesting and something else I can look into which side of the pond where I would pay the least tax.
  11. You are quite right, you need to look at the tax regime in each country and make the best decision for you.

    The double taxation agreement protects your pension from being taxed in full again if it has been taxed in UK. Australia and New Zealand look to see whether the post-UK taxed pension pushes individuals into a higher tax bracket there and, if it does, they have another bite at the excess. We haven't heard reports of this happening in Canada ... yet.
  12. Great info, many thanks, at least now I know.
  13. Just a few days to go now till I can call the UK and get my pension in the works. Since found out there is a "tax treaty" in place between the UK and Canada, monthly amount will NOT
    be taxed in the UK but I have to declare it here as income and pay tax. As for the small lump sum, from what I'm told that's NOT included in the tax treaty so will be taxed on both
    sides of the pond, won't be much left lol but every bit helps.
  14. Hi I live in Australia now (only 2 years) but am planning to stay as it's not so bad, what I am beginning to think about is not only my state pension (for what its worth) and RN Pension (ditto!) in how I transfer them to Australia. Gov sites are a nightmare to get head around! Any advice from knowledgable folks like yourselves?
  15. Your state pension is paid and taxed from UK - no option I am afraid.

    If your RN pension is preserved you can transfer it to another pension arrangement. You need to write to SPVA requesting a CETV (Cash Equivalent Transfer Value), ask the new pension arrangement what it would buy in their arrangement and, if you like what is offered, go ahead with the transfer. Just asking does not commit you.

    If your RN pension is in payment you cannot transfer it but you can have it paid gross in Australia (see my comments about double taxation agreements above). You need to write to SPVA and your tax office to get this done. Paymaster will charge about £2.75 per month to do it and Citibank, who handle overseas payments for Paymaster, will charge you 1.5% of the amount paid, using the spot rate for the Australian Dollar on the day of the transfer. It is a good idea to take advice about the pros and cons of doing this.

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