As a member of the Armed Forces, your loyalty and dedication to serve your country should be recognised as the achievement it is. And it formerly was, however cut backs and austerity measures have had a huge impact on the UK’s armed forces, and have also resulted in pension benefit reductions which have thrown many long-serving military personnel’s retirement plans into disarray.
Early retirement on a military pension can be forgotten about, as the funds are simply not there anymore. The pension pot is in severe deficit, and the only way to counter this is to extend the retirement age, reduce the benefits (the indexation was moved from the RPI to the CPI index in 2011, and has meant that individual pension funds now contain 13% less than they would have just three years later), and prevent anyone from removing their pension from the uncertainty represented by the UK pension market.
As of April 2015 no more public sector transfers will be allowed, meaning that the Government are able to keep more money in the UK to spread across other sectors in the hope of somehow balancing the books. It would seem on the face of it; a thankless task.
For expatriates with military pensions, the option to transfer into a more flexible non-deficit fund based overseas is still available, but not for long.
A QROPS provides an array of benefits which could never be matched by the UK pension market, a market widely viewed to be on its knees.