Rumours in the media of consideration being given by the Chancellor to cutting the pension tax-free Lump Sum Allowance (LSA) in the next budget, is causing alarm amongst Members of the Forces Pension Society and the wider military community. If such a tax is imposed, it will impact everyone serving in the Armed Forces. This comment is typical of those we are receiving:
“My plan, to ensure my family’s financial security, relies on the lump sum payment, as it has been promised for the over 25 years I’ve already served.”
Political decision – makers must understand the purpose of the Armed Forces Pension Scheme. It is to sustain operationally effective Armed Forces by incentivising service and providing a financial platform for a second career as a demonstration of the nation’s commitment to those who have served their country – as enshrined in the Armed Forces Covenant. Reneging on this promise would be corrosive and undermine confidence in those who serve, that the Government will honour its obligations – and all that implies for Armed Forces retention.
On 28 June, the Government announced it would enshrine the Armed Forces Covenant in law. The Prime Minister stated:
“I made a promise to serve those who have served us. Through the new Armed Forces Covenant, we are delivering on that promise… our Armed Forces Covenant will put our Armed Forces community at the very heart of government decision-making.”
This was accompanied by a pledge for a “wider commitment to renew the contract with those who have served the country, ensuring they are treated with respect and long-term security.”
Neil Marshall, CEO of the Forces Pension Society said:
“ We trust these media rumours are just that – rumours. If not, the Prime Minister will risk reneging on the promise he made to the Armed Forces just a few weeks ago.”
See also: New deadlines for the AFPS 15 Remedy RSS plan
