Armed Forces Pension Scheme Guide

The Armed Forces pension is one of the most generous in the UK. AFPS 15 provides a guaranteed career-average income from State Pension Age, with Early Departure Payments bridging the gap for those who leave before then. Service personnel do not contribute to their pension — it is fully employer-funded.

Updated July 2026 · 2026/27 figures

Whether you are currently serving, recently left, or planning your transition, understanding your Armed Forces pension is central to your retirement plan. This guide covers all three schemes — AFPS 75, AFPS 05, and the current AFPS 15 — and explains how each one works.

The three Armed Forces pension schemes

There have been three distinct Armed Forces pension schemes. Which one applies to you depends on when you joined and when you left service.

Members who were in AFPS 75 or AFPS 05 on 31 March 2015 were moved to AFPS 15 from 1 April 2015, subject to transitional protection. The McCloud remedy (see below) subsequently gave eligible members the option to choose which scheme applies for the “remedy period” 2015–2022.

AFPS 15: the current scheme

AFPS 15 is a Career Average Revalued Earnings (CARE) scheme. Each year of service earns you a slice of pension based on that year’s pensionable pay, and those slices are revalued annually by CPI + 1% until you draw them.

Accrual rate and calculation

The accrual rate is 1/47th of pensionable pay per year. For a Corporal earning £35,000:

• Annual pension earned that year: £35,000 ÷ 47 = £744.68
• That slice is then revalued by CPI + 1% each year until retirement

A full career of 22 years at an average pensionable pay of £38,000 would build roughly £17,744/year before revaluation — more with career progression.

Member contributions

Unlike most other public sector schemes, members of AFPS 15 pay no pension contributions. The pension is fully funded by the Ministry of Defence. This is a significant benefit: in comparable schemes, employees contribute 5–12% of salary.

Normal Pension Age

The Normal Pension Age (NPA) for AFPS 15 is State Pension Age, currently 66 and rising to 67 between 2026 and 2028. You can draw your pension early with an actuarial reduction from age 55 (rising to 57 in 2028).

Death benefits

• Death in service: Lump sum of 3× pensionable pay, plus a survivor pension of 62.5% of the pension the deceased would have received
• Children’s pensions: Paid to eligible dependent children
• After retirement: Survivor pension of 62.5% of your pension, paid for life

Early Departure Payment (EDP)

Leaving the Armed Forces before Normal Pension Age does not mean waiting until 67 to receive any benefit. AFPS 15 provides Early Departure Payments (EDPs) for those who leave before NPA but after qualifying service.

EDP eligibility (AFPS 15)

You qualify for an EDP if you leave with at least 20 years’ qualifying service and are at least age 40 (or have at least 20 years’ service regardless of age for those in certain exit schemes). EDPs provide:

• A monthly EDP income from the day you leave until your pension comes into payment at NPA. This is a percentage of your earned pension, not the full amount.
• An EDP lump sum on leaving — approximately 2.25× the annual EDP income

The EDP income is roughly 34.3% of your accrued pension, rising to 50% after 40 years of service. It acts as a bridge until your full AFPS 15 pension commences at State Pension Age.

AFPS 05: key features

AFPS 05 is also a CARE scheme but with different rules. Key points:

• Accrual: 1/70th of pensionable pay per year (less generous than AFPS 15’s 1/47th on a like-for-like basis, but AFPS 05 has a lower NPA)
• Normal Pension Age: 55 (Early Departure Payments available from age 40 with 18 years’ service)
• Lump sum: No automatic lump sum; commutation available at NPA
• Resettlement Commutation: On leaving, you can convert part of your EDP income into a one-off lump sum
• Revaluation: CPI in deferment; CPI in payment

AFPS 75: final salary scheme

AFPS 75 is a final salary scheme, now closed to new accrual. Benefits accrued under AFPS 75 before April 2005 remain in place.

Under AFPS 75, an Officer who retired at age 38 after 16 years on a final salary of £55,000 would receive: (16 ÷ 48) × £55,000 = £18,333/year plus a lump sum of £55,000 (3× pension), both payable immediately.

Attributable Benefits

If you suffer an injury, illness, or death that is attributable to service, the Armed Forces Compensation Scheme (AFCS) and the pension scheme provide additional benefits:

• Invaliding pension: An enhanced pension if you are medically discharged, calculated as if you had served to your minimum qualifying service period
• War Disablement Pension / AFCS Guaranteed Income Payment (GIP): Tax-free payments for service-attributable injuries, rated by tariff (Tariff 1–15)
• Attributable death-in-service: Enhanced lump sum (up to £570,800 under the AFCS) and enhanced survivor pension if death is attributable to service

The McCloud remedy

A 2018 Court of Appeal judgment (McCloud & Sargeant v Lord Chancellor) found that transitional protections applied when moving members to 2015 schemes unlawfully discriminated by age. Younger members moved to new schemes sooner than older colleagues.

The remedy for Armed Forces pensions covers the remedy period 1 April 2015 to 31 March 2022. Eligible members can choose whether to have their service during this period treated under their legacy scheme (AFPS 75 or AFPS 05) or AFPS 15, whichever is more beneficial. The Veterans UK Pension department will contact eligible members with a “Deferred Choice Underpin” (DCU) — this is typically taken at retirement or on leaving service.

Pension increases in retirement

All three AFPS schemes increase pensions in payment annually in line with CPI (Consumer Prices Index). There is no cap. In years of high inflation this is a very significant protection — the full CPI increase applies from the first year the pension is in payment.

The AFPS 15 pension is also revalued by CPI + 1% during accumulation (while you are serving and your pension is building). This is more generous than most other public sector schemes, which typically revalue by CPI alone.

Pension and tax

Your Armed Forces pension is taxable income, the same as any other occupational pension. The Lump Sum Allowance of £268,275 (2026/27) applies to tax-free lump sums from all your pensions combined, including the AFPS 75 automatic lump sum and any commutation you take from other schemes.

Armed Forces pensions are not tested against the Annual Allowance in the same way as civilian DB pensions while you are serving. However, if you have other pension savings (such as a SIPP or previous employer pension), you should consider total pension input amounts.

Practical planning tips

• Get your pension statement early: Request your AFPS 15 pension record from Veterans UK to understand your accrued entitlement
• Model the EDP bridging period: Work out what your EDP income covers and how much you need to bridge to SPA with savings or a second career
• Check for AFPS 75 / AFPS 05 benefits: If you served before 2015, make sure legacy benefits are recorded correctly and haven’t been lost in the scheme transition
• Join the Forces Pension Society: FPS membership costs around £47/year and gives access to expert pension advisers who know the AFPS rules inside out
• Consider Resettlement Commutation carefully: Converting EDP income to a lump sum reduces your bridging income — only do this if you have a clear use for the cash

Official resources

• Armed Forces Pension Scheme — GOV.UK
• Forces Pension Society (FPS) — Isaac’s partner organisation
• Armed Forces Compensation Scheme (AFCS) — GOV.UK
• Veterans UK — pension queries and statements
• AFPS 15 McCloud remedy information — GOV.UK