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Payment Of Pensions In Sterling In Nepal

The matter of payment of pensions in Nepal in sterling rather than rupees has been raised over the years by retired Gurkhas and they have been briefed on the options.  British Gurkha pensions are calculated in Indian rupees to maintain the link to Indian Army pensions.  Most Gurkha pensioners in Nepal receive their pensions through their personal bank account.  

A small number of pensioners, mainly the elderly who live in the more remote villages, receive their pensions in cash through the Area Welfare Offices of the Gurkha Welfare Scheme.  All pensions in Nepal are converted to Nepali rupees at the peg rate between the Indian and Nepali rupee of 1.6 prior to payment.

Gurkha pensions in Nepal are paid under unique arrangements at no cost and free of tax.  This service is not provided to other pensioners of the British Army living outside the UK.  

Commonwealth and British personnel receive their pensions in the UK through a commercial agency, Equiniti Paymaster Ltd.  These pensioners have two options if they live outside the UK, and they can either: 

  • Have their pensions paid to a bank in the UK at no cost, and then arrange transfers overseas through the banking system, which will attract a cost, or;
  • They can have their pensions paid in local currency in the country of their choice, which will attract a small administrative fee from Equiniti Paymaster Ltd, but there will be a loss in value due to the use of commercial exchange rates.

Gurkha pensioners are able to request their pensions are paid in sterling through Equiniti Paymaster Ltd in the UK, and some have done so.  

The MOD would not wish to set up an additional arrangement for Gurkha pensioners which would put them in a more advantageous position over Commonwealth and British pensioners.