Don’t include personal or financial information like your National Insurance number or credit card details. This abatement is known as a “National Insurance Adjustment” and is applied to your Armed Forces pension from the point you reach your state pension age; it does not matter whether you elect to take your State Retirement pension at the earliest opportunity or defer it to a later date, this National Insurance Adjustment is applied at your state pension age regardless. Nevertheless, there is a second form of adjustment made to your Armed Forces pension that could occur when your State Retirement pension kicks in; this is known as the Guaranteed Minimum Pension (GMP) adjustment, and this will affect anybody with an Armed Forces pension from service given prior to 6th April 1997. The system is becoming simpler for younger service personnel because from 6th April 2016 there will no longer be any difference between the National Insurance rates payable – every employee will pay National Insurance at the higher Contracted In rate, no matter what type of pension scheme they have. The Pension Calculator is for guidance purposes only. This abatement is known as a “National Insurance Adjustment” and is applied to your Armed Forces pension from the point you reach your state pension age; it does not matter whether you elect to take your State Retirement pension at the earliest opportunity or defer it to a later date, this National Insurance Adjustment is applied at your state pension age regardless. Below is an example of how an annual increase would be calculated with an inflation uplift of 2% for an individual who has a reasonable amount of service prior to 1997: There is another little quirk in this calculation that throws a spanner in the works too, and that is that all GMP earned from 6th April 1988 has its annual increase capped at 3% so either the full inflation uplift or 3%, whichever is the smaller, is applied to that portion of your pension. * There are three main pension schemes: 1. Armed Forces Pension Scheme 1975 (AFPS 75): Closed to new entrants on 5 April 2005. All content is available under the Open Government Licence v3.0, except where otherwise stated, National restrictions in England from 5 November, preserved pension forecast form (form 14), Claim if you were injured while serving in the armed forces, Coronavirus (COVID-19): guidance and support, Transparency and freedom of information releases. For more information, go towww.ForcesPensionSociety.org, Editor: Mal Robinson t: 0191 442 0198e: MRobinson@balticpublications.co.ukGear House, Saltmeadows Road, Gateshead, Tyne & Wear. On 6th April 1978 when the Government introduced a form of additional State Retirement pension called “State Earnings Related Pension Scheme” (SERPS), it also introduced a two tier National Insurance Contribution system too – Contracted In rates and Contract Out rates. It is not intended to provide you with financial advice. What the employer had to promise before the Government would allow a company scheme to be declared a Contracted Out scheme was that its pension scheme would pay a pension of at least the value of the SERPS additional state pension an individual would have earned had they been in the SERPS system. Once you have retired and all the while you are receiving your Armed Forces pension and not your State Retirement pension, the whole of your Armed Forces pension is increased annually by the relevant inflation uplift applicable each April. I’m not going to add that into a worked example here because it is complicated and there is not enough space on the page! Armed Forces pensions, once awarded, are adjusted in April each year by the Consumer Price Index (CPI). The link between occupational pensions and old age pensions stems back as far as 1947. However, once your State Retirement pension comes into payment, it automatically assumes responsibility for applying the increase to the GMP figure as part and parcel of your State Retirement pension, and so the GMP element of your Armed Forces Pension is no longer increased on an annual basis. *Please be aware that the pension rules that apply to you are those in force at the time of your discharge. A minimum of two years’ service is needed in the scheme in order to be entitled to any pension. However, unlike the National Insurance Adjustment, the GMP adjustment only occurs when your State Retirement pension comes into payment; if that happens to be your state pension age then it will be effective from that point, but if you defer the drawing of your State Retirement pension then it does not take effect until the date that pension is put into payment. In that year, the 1947 Social Security Act deemed that all members of a public sector pension scheme were to have their government occupational pension abated by (what is now) 88p for each year of reckonable service given in the scheme, from the moment they reached their state pension age.