Around this time of year (April-May), those in receipt of an Armed Forces Pension should receive an ‘Advice of Payment’ letter from Equiniti (the people who pay Armed Forces Pensions on behalf of Veterans UK):
The letter notifies you of the new pension rate for the tax year (in this case 2024/25) which takes into account the CPI increase (based on the previous September’s CPI rate announced in October as 1.7%)
The letter confirms:
- Your current annual pension rate and the increase to be applied (in this year’s case 1.7%)
- Your new annual pension rate (effective from 7 Apr)
- Details of payments for the next 12 months (gross and net)
- Your Tax Code and PAYE reference
- Your Pension Reference
- The bank account your pension is being paid into
The envelope also contains your P60 End of Year Certificate for the previous tax year, for individual action if you must fill in a tax return. The P60 includes:
- Your National Insurance Number
- A telephone number for HMRC
- Previously you would have seen confirmation of the % of Lifetime Tax Allowance (LTA) used. As LTA has been abolished this is now replaced by ‘The Lump Sum and Death Benefit Allowance Used as at the end of the Tax year’.
- For those who crystallised or took their pension from 6 April 2006 to 6 April 2024 only: This will be the amount of LSA usage calculated using the Standard Transitional Calculation method and this method has been automatically applied. If the member has applied, or will apply, in the future, for a Transitional Tax-Free Allowance Certificate (TTFAC) then that figure may be different. The TTFAC should be considered the authoritative document. (A TTFAC may allow you to take more tax-free lump sum that would otherwise be the case if you relied on the standard transitional calculation method. The difference with a TTFAC is that it records the amount of actual tax-free lump sum taken rather than calculating it as 25% of the value of the total pension benefits. Read more about this here.)
- For those taking benefits from 6 April 2024 onwards and who have not previously taken any pension benefit: It will show the actual pension lump sum taken.
Finally, on the back of the letter you will find an instruction to inform Equiniti of any change of name, address, bank or building society details. This is a useful reminder to all to take the necessary action to inform them should your circumstances change. If you don’t, it could result in the temporary suspension of your pension payments. So if you need to inform them of any changes or you have not received such a letter, Equiniti can be contacted at:
Equiniti
PO Box 1246
Sutherland House
Russell Way
Crawley
RH10 1UH
Tel: 0345 121 2514
