MINISTRY OF DEFENCE
News Release (PN_044/2008) issued by The Government News Network on
Increased
retention bonuses worth up to £15,000 will be announced today, to
reward those who stay in the armed forces, alongside a new £20
million pound pilot scheme to offer more affordable home ownership
for service personnel and their families.
The Commitment Bonus, which encourages people to extend their
service in the Armed Forces, will almost treble for service
personnel staying in service for eight years. The bonus can also
help more junior personnel achieve their home ownership aspirations.
Secretary of State for Defence, Des Browne said:
"I am determined that the government shows its commitment to
our Armed Forces, and to help reinforce this I am announcing a big
increase in the maximum commitment bonus of up to £15,000.
"In recognition of the aspiration that many Service
personnel have to buy a home we are also announcing the creation
of a new pilot scheme to boost home ownership within the Armed Forces."
All those personnel below Officer level passing the four year
service point will have access to the new Commitment Bonus scheme
from next year, although the exact start point will be determined
by single service manning requirements. The longer they serve the
higher the payment will be. The new scheme is designed to reward
past service and to encourage further retention in the critical
four to eight year period, where we face the greatest retention challenge.
Important steps have already been taken to assist Service
personnel with home ownership. Existing schemes, such as the Key
Worker Living Programme, have made an important start in promoting
affordable housing for Service personnel. The new measures take
MoD financial assistance to those wanting to buy houses still further.
In the coming months we will work with commercial providers and
public bodies to identify the most suitable approach, which is
likely to be based on shared equity or rent to buy arrangements
END
Notes to editors
Both changes will be implemented in 2009/10.
Commitment Bonus
* All those below Officer level, passing the four year service
point from next year onwards will have access to a new Commitment
Bonus scheme with graduated payments of up to £15K if they serve
up to another five years.
* The availability of a lump sum payment nearly three times as
large as that currently available should also help these more
junior personnel and their families achieve their aspirations,
such as getting on the housing ladder.
* Each Commitment Bonus point is accessible to those who have
delivered the required service and have not given notice to leave.
Personnel who receive a Commitment Bonus will be required to serve
for a minimum further period of 12 months from the qualifying date
of the payment.
* The individual can take the Commitment Bonus paid in up to two
bites - for example at the 4 year point and the 8 year point. If
early bites are taken, the overall amount received will be
reduced; thus providing the incentive to wait and take the larger
sum later.
Years Gross Second bite claimed at: Service amount
5 years 6 years 8 years
4 3750 1250 2500 7500
5 5500 1250 6250
6 7500 5000 8 15000
* Commitment Bonuses are a taxable lump sum and are subject to
National Insurance contributions.
Home Ownership
* MOD recognises and understands the aspiration of many Service
personnel to buy their own home, in common with the wider
population. Surveys confirm that this is a factor which
influences retention.
* Existing schemes to help Service personnel include the Long
Service Advance of Pay, and access to the Government's Key
Worker Living Programme - recently extended so that Service
personnel can qualify for all elements of the scheme, and will be
treated as a priority group across England and Wales.
* For this new scheme, MOD will be working with public bodies and
commercial providers, to establish how best to tailor it to the
particular needs of Service personnel, such as the need for
mobility during a Service career.