HM Forces Pensions

[liamnrach]

I have searched through the money threads, but cannot seem to find any information on HM Forces Pensions. First a bit of history (promise I'll keep it short!)......

I'm in the RAF, due to leave next year after 24 years service (applying for the Met Police at present). When I leave, I will be entitled to draw a pension of around £1000 per month. The amount does not change until I reach the age of 55, at which point it is index-linked to whatever a person in the same rank gets at that time (historically it nearly doubles).....see told you I would try to keep it short!!

Q1. Will I still be entitled to the pension in the event of gaining PR (and eventually citizenship) in NZ?

Q2. If so, Will I be able to have my pension paid straight into a NZ bank account?

Q3. Will I still get the index-link rise at age 55?

Q4. What tax do I pay (UK or NZ or both)

I appreciate that these may be topics beyond the (clear) expertise on this forum, but thought I would give it a shot? Any info would be appreicated....this is my last hope really as my so called specialists do not seem to know the answers!

Thank You in advance

Liam

[wiki]

Have you tried asking the Army - you won't be the first retiree to emigrate. Surely the MoD has a pensions section?

1. Yes, almost certainly since you've earned it.

2. MoD should tell you about paying direct to NZ too.

3. Ditto on the index rise, but no reason why not when you've earned it

4. Under the joint-tax agreement between UK and NZ you'd only have to pay tax in NZ - but you'd better ring Inland Revenue to clarify for your own piece of mind.

I'd seriously want to take this up direct with MoD rather than any other "expert" ... unless they don't know you plan to retire?

[JoanneG]

Almost certain you will be able to draw your pension in NZ as there is an agreement between our countries for pensions plus my sister in law and husband, both ex-RAF are headed out in August and I'm pretty sure they wouldn't be going if they weren't going to continue getting their pensions! I have mailed them your questions and will forward their answers once I get them.

[Croft]

We're in the same situation as yourself, except in that in our case it's the wife's Army pension! You will find this site helpful http://www.hmrc.gov.uk/cnr/uk_gov_pensions.htm

Pensions paid for former service to the UK Government are known as Government Service Pensions. Pensions paid for former employment with the H M Forces, Civil Service and Foreign and Commonwealth Office are all regarded as Government Service Pensions.

...

Usually Government Service and Local Authority Service Pensions paid to British nationals living overseas remain taxable in the UK. You will still be eligible to receive full UK Personal Allowances and reliefs.

The main exceptions are Australia, Canada, New Zealand and Cyprus where exemption for Government Service and Local Authority Service Pensions can be claimed.

If an individual is a national of and resident in an overseas country, exemption under a Double Taxation Agreement may also be due for a Government or Local Authority Service Pension.

I think you'll have to pay NZ tax though.

[PECJ]

I'm in the same situation as you: (except RAF 20 years, moving in 9 weeks time). I have completed an IR138 an have not had the results back yet. I'm afraid I can not provide any further clarity - see the reasons below:

I was told by someone at Ty Glas (which will remain your tax office once you leave and wherever you go in the world) that I would still have to pay UK Tax on my penson (not a good thing) although under the Double Taxation agreement I would not expect to pay NZ Tax on the whole amount.

However, reading the posts above may be I am entitled to claim full relief from the UK Tax Burden on my pension. AND because I/we will be new immigrant the pension is not liable for NZ tax for the first 4 years (new NZ Tax rule came in last? year). Clearly that would work out much better.

If you send my your email I'll let you know when the UK Inland Revenue get back to me.

As to the other questions:
1. Yes you/I are entitled - we have earned it.
2. You can arrange with the pensions people (now all one happy family under JPA) to have the cash sent wherever you want (if overseas at the FFR rate as well)
3. Will get the rise - see Q1.

Hope this helps. Email me if you have any other Qs - I'm a year ahead of you.

Yours
Peter J

[liamnrach]

Thank you everyone for your help here....

I know we have specialists (so called) in the MoD, but I have got more answers by posting on this forum! Once again it has proven to be most useful

Peter - Thank you and I have PM'd you my e-mail...

Croft - Thank you for the link - most useful!

Wiki/Joanne - Cheers guys, really great help!

Thanks again

Liam

[westies]

We have been here over a year now.. The MOD pension we get paid into our UK bank account still, and see it as savings, also we can use it for anything we need to pay in the UK like our life insurance policies which were well worth keeping. Of course you will still get the index link when it is due.
Tax wise you can pay in the UK or here in NZ, we have decided to pay tax on it here in NZ, seems to work well for us.
So in a nut shell your entitlements don't change where ever you decide to live following the UK Forces, you just need to make the decisions on whether to have it paid here or simply keep your UK bank account open.
As has been said already there are loads of ex service personnel over here, so lots of advice from those who have already been there and done that so to speak.
Good luck

[liamnrach]

We have been here over a year now.. The MOD pension we get paid into our UK bank account still, and see it as savings, also we can use it for anything we need to pay in the UK like our life insurance policies which were well worth keeping. Of course you will still get the index link when it is due.
Tax wise you can pay in the UK or here in NZ, we have decided to pay tax on it here in NZ, seems to work well for us.
So in a nut shell your entitlements don't change where ever you decide to live following the UK Forces, you just need to make the decisions on whether to have it paid here or simply keep your UK bank account open.
As has been said already there are loads of ex service personnel over here, so lots of advice from those who have already been there and done that so to speak.
Good luck

Thanks again....

Its good to hear from people who have as you've said 'been there, done that'!

This was my main reason for posting the question here in the first place, as I knew the answers would be forthcoming much quicker than seeking the advice from the MoD!

Cheers all.....

Liam n Rach

[JoanneG]

Hi Liamnrach - looks like you've got lots of info on this. My brother-in-law has sent the message below (once he recovered from jet-lag!).

Answer:
Sussed it all out with the office of the paymaster general - le grande fromage with regard to this struff - Yes you get your pension yes it is index linked at 55 yes you pay tax - you choose UK or NZ ( there is a reciprocal tax agreement - they talk to each other ). I plan to keep it in the UK and use all tax allowance against it to keep investments etc ticking over - plus some things eg airline tickets seem to be a bit pricey in NZ$. you can also have a stearling acount with an NZ bank so your money is there and ready to convert at a time of your choosing eg good exchange rate. WESTPAC are about the best bank we have talked to in Wellington in May 07 Good Luck

Happy rainy Bank Holiday, oops public holiday!

[liamnrach]

Hi Liamnrach - looks like you've got lots of info on this. My brother-in-law has sent the message below (once he recovered from jet-lag!).

Answer:
Sussed it all out with the office of the paymaster general - le grande fromage with regard to this struff - Yes you get your pension yes it is index linked at 55 yes you pay tax - you choose UK or NZ ( there is a reciprocal tax agreement - they talk to each other ). I plan to keep it in the UK and use all tax allowance against it to keep investments etc ticking over - plus some things eg airline tickets seem to be a bit pricey in NZ$. you can also have a stearling acount with an NZ bank so your money is there and ready to convert at a time of your choosing eg good exchange rate. WESTPAC are about the best bank we have talked to in Wellington in May 07 Good Luck

Happy rainy Bank Holiday, oops public holiday!

Sorry it's taken so long to reply

That is soooo useful!! A BIG sigh of relief for us to know that we are still entitled to it!! Yehar!

Thanks again

Liam n Rach