Good news for pensioners!
Sep 1st 2014, 11:06 am
#31
BE Enthusiast
Joined: Oct 2011
Location: UK
Posts: 745
Re: Good news for pensioners!
J.J.
In addition to the basic State Pension, I have 3 different types of additional State Pension. Graduated contributions; SERPS and another one.
Some of these components do not amount to much but because I was not contracted out they add up to a significant sum.
The State Pension is not taxed but it does add into your annual income for tax purposes. They modify your tax code which is then is applied to your private pension to adjust for the State Pension. If they have altered your tax code which is applied to your private pension then your net income from this will fall compared to before you received the State Pension.
You can check your tax code on your monthly payslips before and after to see if it has changed.
In addition to the basic State Pension, I have 3 different types of additional State Pension. Graduated contributions; SERPS and another one.
Some of these components do not amount to much but because I was not contracted out they add up to a significant sum.
The State Pension is not taxed but it does add into your annual income for tax purposes. They modify your tax code which is then is applied to your private pension to adjust for the State Pension. If they have altered your tax code which is applied to your private pension then your net income from this will fall compared to before you received the State Pension.
You can check your tax code on your monthly payslips before and after to see if it has changed.
This is the only pension I am receiving, my Tax Code has not changed in relation to this reduction in Armed Forces Pension. I don't yet know what my State pension will be and whether or not GPS will show up.
As for contract out, I don't really recall as it was 40 yrs ago I was in military but I 'feel' that we had no choice of contract in or out.
The reduction is upon reaching State Pension Age under National Insurance Modification rule and the official word is:
The reason for the abatement goes back to 1948 when the National Insurance (NI) Scheme was made compulsory for all employed personnel.
When flat rate benefits were introduced, the Government took the view that, to avoid over-provision of pension benefits, account should be taken of other benefits payable at the State Retirement Age (SRA).
As a result, on reaching SRA, the Armed Forces Pension Scheme (AFPS) pension of Service personnel who enlisted on or after 1 July 1949 is reduced by £0.8708 per annum for each complete year of reckonable Service between 30 June 1949 and 1 April 1980. Thats me This reduction is referred to as the NI Modification rules.
In addition pensioners, who also contributed to the Graduated Pension Scheme (GPS) whilst in the Service during the period 3 April 1961 to 5 April 1975, (me again) have their Armed. Forces pension reduced by the amount of the basic graduated pension (also payable at SRA as State benefits) earned by their graduated contributions. This reduction is known as a GPS abatement.
Sep 1st 2014, 2:13 pm
#32
BE Forum Addict
Joined: Apr 2009
Location: Scotland & Touraine [37]
Posts: 3,019
Re: Good news for pensioners!
J.J.
Sorry, when I read that you had reached 65, I assumed that you were in receipt of your State Pension.
Sorry, when I read that you had reached 65, I assumed that you were in receipt of your State Pension.
