HC Deb 20 March 1974 vol 870 cc119-20W
Mr. Michael Latham

asked the Secretary of State for Defence if he will publish in the OFFICIAL REPORT a table showing the gratuity payable to members of Her Majesty's Forces at the normal age of retirement appropriate to their rank, indicating in each case when they were last increased and what was the previous level.

Mr. William Rodgers

I take it that the hon. Member is referring to the terminal grant which is paid to Service personnel on retirement, and which is three times the annual rate of retirement pension. The pension varies according to the code, which is adjusted at each pay review, and according to rank and length of service. Examples of the terminal grants payable at the full career point since 1st April last under the 1973 code are as follows:

Corporal … … £3,384
Sergeant … … £3,765
WO1 … … £4,449
Captain … … £5,076
Major … … £6,063
Colonel … … £9,384
Rates of pension were previously increased in the 1972 code, effective from 1st April 1972. Rates of pensions under that code were overall about 6½ per cent. below the levels of the 1973 code, because that was the average amount of the 1973 pay increases, but the precise difference varies somewhat by rank.

Mr. Michael Latham

asked the Secretary of State for Defence if, in the light of the increase in housing costs, he will now increase gratuities available to personnel serving in Her Majesty's Forces on their retirement; and whether he will make a statement.

Mr. William Rodgers

No, for two reasons. First, the terminal grant paid on retirement is intended, together with the retirement pension, to enable the pensioner to make adequate provision for himself throughout his retirement. This intention is defeated if the whole of the grant is spent at once on a single expensive item such as house purchase. Second, if terminal grants are to remain tax-free, they must be proportionate as now to the amount of full career pension. There are other possible ways to help Service personnel with house purchase difficulties apart from increasing the amount of terminal grants, and my Department is investigating these.

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