ÿFinancial secretary Ruth Kelly told MPs this week that the government’s pensions simplification document proposes tax free lump sums should only be available to those over 55.
But many service people – particularly in the RAF -ÿretire from the forces before then and use their gratuity to help them buy a house while returning to civilian employment.
Kelly told Taunton Tory Adrian Flook in reply to a question in the House of Commons: ‘The Government is considering separately the position of members of the Armed Forces pension scheme in the light of this proposal (to bar tax-free lump sums for theÿunder-55s).’
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