the help that's needed
As this year's Royal British Legion's Poppy Appeal gets under way, Rosie Murray-West of the Telegraph is asking that people spare more than a thought for the younger ex-servicemen & women who are finding it a struggle to cope with the many impacts being felt by the recession.
Now that poppies have started to appear in shops, churches and stations, many people will think of Second World War veterans as they pin them on to their lapels.
However, due to the number of conflicts since 1945, the Royal British Legion is increasingly concerned with younger ex-servicemen and women. For many of them, in the current economic climate, it is financial advice and help that is the top priority.
The Legion launched its Poppy Appeal on Thursday. And it expects to see record demand for debt advice.According to Alison Wyman, head of the benefits and money advice service (BMA) at the Legion, many servicemen and ex-servicemen are struggling. The service expects to offer help to more than 10,000 people this year.
Ms Wyman said that servicemen can struggle with household bills when they come out of the Armed Forces. While they are serving, many bills are deducted from their earnings, while rent can be cheaper. "We help people to learn to budget," she said.
Adam Brown, who was helped by the Legion's money advice service in 2008, struggled with readjusting from army life. The 40-year-old, from Weston-super-Mare, was in the Royal Green Jackets regiment from 1997 to 2001, and now has a wife and two young children.
"I lived with my mother for the first year after I got out of the Army," he recalled. "I found it so hard to get back to budgeting for myself. In the Army, I didn't have to worry about council tax and my accommodation was £100 a month. When you come out, you suddenly have to worry about gas, electricity and water bills."
Mr Brown was helped by the BMA service after he was made redundant from his job as a motorcycle salesman in 2008. He was forced to sell his house and was facing eviction from his rented home. BMA offered him advice and paid for him to go personally bankrupt. It also helped him to claim benefits.
"When you are a soldier, you are taught that pride is your strongest weapon," he said. "I didn't take much notice of the problem I was facing."Listed below are some of the specific issues facing ex-servicemen and those currently serving in the Armed Forces.
Death and injury
The Ministry of Defence will pay compensation to the families of those killed in action and will offer a death-in-service benefit of four times salary to families of all those who die before pension age.Injury and death caused by service on or after April 6, 2005 is dealt with by the Armed Forces Compensation Scheme (AFCS). The War Pension Scheme (WPS) compensates for any injury, illness or death that occurs up to this date.
There are two main types of AFCS benefits. For injury or illness, the AFCS provides a tax-free lump sum payment, the size of which reflects the severity of the pain and suffering. The lump sum ranges from £1,200 to £570,000. For those who sustain multiple injuries from the same incident, the scheme awards some compensation for each injury, up to a maximum of £570,000.
For those with the most serious injuries and illnesses, the AFCS also provides an income stream known as the Guaranteed Income Payment (GIP). This is a tax-free, index-linked monthly payment, which is paid from the point of discharge for life and will reflect the claimant's age and the effect of an injury on future promotion prospects.
The process for the WPS or the AFCS is similar, and claims can be made through Veterans UK. For information on private military insurance, check out www.paxinsurance.aon.co.uk.
There are two pension schemes currently being run by the Armed Forces. The first was introduced in 1975, but was replaced on April 6, 2005 by a scheme with improved key benefits (death-in-service benefits are now four times, rather than three times, salary).
Like most in the public sector, this is a non-contributory scheme, with the pension based on earnings. All those in the Armed Forces receive a 70th of their pay for each year of service, in addition to a tax-free lump sum worth three times their annual pension at retirement. This may seem less generous than traditional final salary schemes, where people typically earn a 60th of their pay for each year of service. But in most of these schemes people will receive tax-free cash only by giving up some of their pension.
If Armed Forces personnel are still serving at the age of 55, they can retire and are entitled to take their pension plus the tax-free lump sum immediately. If they leave before 55, their pension benefits will be paid at the age of 65; however, the Armed Forces do offer some extra pension benefits under the "Early Departure Payment Scheme".
This scheme aims to encourage people to remain in service at least until the age of 40 and to compensate them for the fact that a full career to the age of 55 or beyond is not available to the majority. People have to serve at least 18 years to be eligible for this benefit.
This income does not increase with inflation, but at the age of 55 they will receive 75 per cent of their preserved pension, which will then increase annually in line with the Consumer Prices Index. At the age of 65, the early departure payment will cease and their pension will become payable. At this point, they will receive their pension, plus the usual tax-free lump sum.
Inheritance tax exemption
Many people are unaware of section 154 of the Inheritance Tax Act. This allows for the families of deceased soldiers, sailors and airmen to receive their inheritance completely free of Inheritance Tax, providing that active service was a contributory factor in their death. Crucially, this exemption applies whenever the injury that contributed to death occurred.
Veterans-UK is the Government's one-stop shop for issues affecting ex-servicemen. Visit www.veterans-uk.info or call 0800 169 2277.
The Royal British Legion: 08457 725 725; www.britishlegion.org.uk
The Services Insurance and Investment Advisory Panel can provide investment and insurance advice to the Armed Forces. Visit www.siiap.org
Increase your donation to The Royal British Legion by nearly a third at no extra cost by donating via Gift Aid.If you are a taxpayer, complete the Gift Aid form (www.poppy.org.uk) and return it to the Freepost address on the website. For every £10 you donate, the Legion can claim back £2.82.