Friday, 25 July 2014

Pensions deadline looms for Armed Forces veterans

This week the government announced the legislative changes to the pensions system outlined in Chancellor George Osborne’s Budget in March – and the consequences for veterans of Britain’s Armed Forces.

Under the new rules, members of private sector and funded public sector defined benefit (DB) pension schemes will be able to transfer to defined contribution (DC) schemes – such as a Personal Pension or SIPP – which allow much more freedom, including the option for those aged from 55-57 to access up to 100% of their pensions as a lump sum, or to leave 100% to loved ones.

However, members of unfunded public sector schemes such as the Armed Forces will not be able to transfer their pensions after April 2015.

The reason behind this apparent disparity is because unfunded schemes are supported by general taxation rather than relying on the reserves and assets set aside by funded schemes – which means that approved transfers could have a major impact on the Exchequer’s coffers.

If you served in the UK Armed Forces for more than 2 years and would like to find out about your options regarding your pension benefits, then get in touch with us now for a free no-obligation review.

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