What Happens to Your AF Pension When You Get to 65 And Start To Receive SP?

**Keith Jones 989** · 23-06-2010, 09:50

I was reading about this and then found some discussion about it on ARRSE but nobody seemed to know the rates or why, so I sent an email to the Pensions Office and this is the response I got:

'All ex-service personnel who have at least 1 years reckonable service prior to 1 April 1980 will be liable for an abatement to their Armed Forces Pension on reaching state pension age i.e age 60 for women & age 65 for men. This abatement will be applied to their Armed Forces Pension at the appropriate age irrespective of whether their state pension is in payment or not.

The reason for this abatement goes back to when the National Insurance Scheme was made compulsory for all employed persons in 1948. This scheme made flat rate National Insurance contributions compulsory for all employees and employers irrespective of whether the employer concerned already provided their own occupational pension scheme. As a result, employers who provided their own occupation pension schemes, were contributing to both pensions schemes for the same period of service.

Provisions were therefore introduced to allow such occupational pension schemes to reduce benefits at age 60/65 by £0.8708 a year for each complete year of reckonable service prior to 1 April 1980.

Additionally, employees who contributed to the Graduated Pension Scheme during the period 3 April 1961 to 5 April 1975 will have their Armed Forces pension reduced by the basic graduated pension earned by their graduated contributions. Again, this reduction is made to prevent an individual from receiving the benefit of both the state pension scheme and an occupational pension scheme for the same period of employment.

The level of abatement notified to an individual on a letter from Pensions Division will differ from the actual amount deducted from the pension by Xafinity Paymaster. This is because there was a change to the method of applying these abatements for individuals who reached age 60/65 on or after 1 May 2008. All such abatements are now subject to increase in line with the Retail Price Index, in other words the same increases which are applicable to an individuals pension are applicable to the level of the abatement.

Example – an individual with 15 years reckonable service prior to 1 April 1980 will be liable for an abatement of 15 x £0.8708 = £13.06 and as a result of Graduated Pension Scheme contributions an abatement of £20.80. The total abatement notified to the pensioner by letter is therefore £33.86.

The pension has however attracted increases amounting to 48.679%, therefore the same increases are applied to the abatement, i.e £33.86 + 48.679% = £50.34 – this is the amount by which the individuals pension will be reduced at age 60/65.'

I have sent a supplementary question (as one always does!) to confirm that the amounts quoted are based on ANNUAL amounts and not weekly nor monthly amounts taken from the AF Pension.

If anybody else out there, who is fast approaching the fateful date, has come across this query, I hope this is helpful

**Gwyn Nicholas** · 23-06-2010, 10:50

So ..in laymans terms, at the age of 65, my pension will be reduced by 22 x £0.8708 (£19.16)+ £20 .80 total = £39.96
I hope that is per year and not weekly/monthly.

The service pension scheme is an absolute joke! You do 22 years (+ in some cases) for a **** pension (compared to what others get) which is then taken into account for TAX...is held against you if you are out of work and seeking unemployment benefit and now (obviously been hiding in the small print once again) it will top up your old age pension. I hope our serving guys considering do the full 22 years are reading this. I signed on for the 22 for the pension at the end of it, had I known it was going to be used to off-set everything else I think I may have reconsidered.

**nasher546** · 23-06-2010, 13:16

Originally Posted by Gwyn Nicholas

So ..in laymans terms, at the age of 65, my pension will be reduced by 22 x £0.8708 (£19.16)+ £20 .80 total = £39.96
I hope that is per year and not weekly/monthly.

The service pension scheme is an absolute joke! You do 22 years (+ in some cases) for a **** pension (compared to what others get) which is then taken into account for TAX...is held against you if you are out of work and seeking unemployment benefit and now (obviously been hiding in the small print once again) it will top up your old age pension. I hope our serving guys considering do the full 22 years are reading this. I signed on for the 22 for the pension at the end of it, had I known it was going to be used to off-set everything else I think I may have reconsidered.

Gwyn,

Totally agree with you. I would imagine this will make some of our serving Lads reconsider. Also thanks for you 666th post, (you little devil).

**kevjames84** · 23-06-2010, 20:30

So does anyone know what happens to the pension for the guys and gals who joined post 1 April 1980, if i'm reading it right there must be a different system in place (or i hope so).

**Rog Ball 01** · 23-06-2010, 20:45

Well I think this stinks. To cap it all, we pensioners did not get an increase this year, yet those who make the rules about our pensions get an increase.

Are we tied to what was said yesterday by the Chanceler about public service pay and pension being frozen. If we are, we the pensioners are once again missing out. We have nobody to fight our corner, unlike the public servanzts.

**benney** · 23-06-2010, 22:07

what a load of s### so we have been conend yet again

**Keith Jones 989** · 23-06-2010, 23:53

AND NOW THE GOOD NEWS!

Got my email response which clarified that the figures quoted are the ANNUAL rates of deduction, so the most would be about a quid a week.

Don't forget, though, that SP is taxable from day 1 so anybody on, for instance, Severe Disablement Allowance or Mobility Allowance will move from a work related welfare benefit to a state pension of the same value (as in my wife's case), thereby receiving an immediate pay cut because one is tax free and the other is not!