This may not apply to this specific story but good to know for anyone researching
For pensioners from the army in the late 1700s and the 1800s, the UK offered pensioners a 'deal', they would receive their pension as an allotment of land in another country like Australia, so they stopped receiving the formal pension and received wages - they needed to work as prison warders, police officers, wardens etc for 7 years which gave them a wage, with their formal pension being their land allotment. My gg grandfather and many of his family who served in the Crimea War came to Australia that way.
Pensioned out may be he was paid in another form - land etc
I looked up pensions in the UK armed services, Dd means they were discharged and their pension was paid out - that army pensions CAN be paid as lump sum payments for seriously ill pensioners. I imagine an amputee, or other health conditions would be part of that. It does not mean he is dead. If you cant find him in the UK, look at shipping records as an option. If you can't find his passing, look in other countries, he may have moved to work then send money home for the family.
If his daughters death certificate doesn't have his?? name on it, this could explain it, maybe he left and aunty was grumpy about it.