Armed Forces Pension Guide UK — Military Pension Schemes Explained
How the Armed Forces Pension Scheme works, the different scheme types, how much you'll get, early departure payments, and pension planning for military personnel.
·4 min read
The Armed Forces Pension Scheme is one of the most generous pension arrangements in the UK — it’s non-contributory, provides a guaranteed income in retirement, and includes valuable early departure benefits. This guide explains how it works across all three scheme types.
The Three Schemes
Scheme
Who it covers
Type
AFPS 75
Those who joined before 6 April 2005
Final salary
AFPS 05
Those who joined 6 April 2005 – 31 March 2015
Final salary
AFPS 15
All serving personnel from 1 April 2015
Career average (CARE)
Most currently serving personnel are in AFPS 15. If you joined before 2015, you may have benefits in earlier schemes too — these are protected.
AFPS 15 — The Current Scheme
Feature
Detail
Type
Career Average Revalued Earnings (CARE)
Accrual rate
1/47th of pensionable earnings for each year
Revaluation
Linked to Average Weekly Earnings (usually higher than CPI)
Normal pension age
State Pension age (currently 67, rising to 68)
Lump sum
Automatic 3 × annual pension (tax-free)
Employee contributions
None — non-contributory
Death in service
Lump sum of 4 × annual pensionable pay
Dependant’s pension
Partner receives pension for life
How the Pension Builds Up
Each year, 1/47th of your pensionable pay is added to your pension pot. Previous years’ accruals are increased annually.
Year
Salary
Pension accrued that year
Cumulative pension (simplified)
1
£25,000
£532
£532
5
£30,000
£638
~£3,200
10
£35,000
£745
~£7,200
20
£42,000
£894
~£17,500
Figures are simplified — actual amounts include annual revaluation, which increases earlier years’ accruals.
Early Departure Payment (EDP)
If you serve long enough, you don’t have to wait until State Pension age:
Criterion
Requirement
Minimum age
40
Minimum service
20 years (officers) or 18 years (other ranks)
What You Get
Benefit
Amount
EDP income
Roughly 50% of your deferred AFPS 15 pension (increasing to ~75% at SPA)
EDP lump sum
~2.25 × your EDP income (tax-free)
Full pension
Starts at State Pension age
Example: Sergeant Leaving at Age 40 After 20 Years
Benefit
Approximate amount
Deferred annual pension (at SPA)
~£17,000/year
EDP income (from age 40)
~£8,500/year
EDP lump sum
~£19,000
Full pension (from SPA)
~£17,000/year
Full lump sum (at SPA)
~£51,000
AFPS 05
Feature
Detail
Type
Final salary
Accrual rate
1/70th of final pensionable pay per year
Pension age
65
Lump sum
3 × annual pension (automatic)
Immediate Pension
After 18 years (other ranks) or 20 years (officers) from age 40
Employee contributions
None
AFPS 75
Feature
Detail
Type
Final salary
Accrual rate
1/69th (officers) or 1/69th (other ranks, varies)
Immediate Pension
After 16 years (officers) or 22 years (other ranks)
Resettlement grant
Tax-free lump sum on leaving
Lump sum
3 × annual pension
Employee contributions
None
Comparing the Three Schemes
Feature
AFPS 75
AFPS 05
AFPS 15
Accrual rate
1/69th
1/70th
1/47th
Basis
Final salary
Final salary
Career average
Pension age
55/60 (varies)
65
State Pension age
Immediate Pension
Yes (16-22 years)
Yes (18-20 years)
No — EDP instead
Lump sum
3× pension
3× pension
3× pension
Contributions
None
None
None
Revaluation
N/A (final salary)
N/A (final salary)
Average Weekly Earnings
Additional Benefits
Benefit
Detail
Death in service lump sum
4× pensionable pay (AFPS 15)
Dependant’s pension
Spouse/civil partner receives a pension
Children’s pension
Eligible children receive a pension until age 23 (in full-time education)
Ill-health pension
If medically discharged, enhanced pension based on service and tier
Attributable benefits
Enhanced benefits if illness/injury is caused by military service
Resettlement support
Career Transition Partnership (CTP) for employment support
Tax on Military Pensions
Detail
Treatment
Pension income
Taxed as income (PAYE)
Tax-free lump sum
Not taxed (up to 25% of pension value)
EDP lump sum
Tax-free
Annual Allowance
Military pensions count towards the £60,000 annual pension allowance
Lifetime Allowance
Abolished from April 2024 — no longer applies
Pension Planning for Military Personnel
Action
When
Check your pension forecast
Use the Armed Forces Pension Calculator on GOV.UK
Understand your benefits
Request an annual benefit statement from Veterans UK
Plan for the gap
Between leaving the military and State Pension age, EDP may not cover all your expenses
Consider additional savings
ISAs, SIPPs, or other savings to supplement your pension
Resettlement
Use CTP for transition support and employment
Review dependant nominations
Ensure your pension nomination form is up to date
Take financial advice
Forces MoneyForce and the MoneyHelper Armed Forces page offer free guidance
Useful Contacts
Organisation
What they do
Veterans UK
Manages Armed Forces pension payments
Forces Pension Society
Independent pension guidance and advocacy
MoneyHelper
Free pension guidance including Armed Forces section
SSAFA
Financial assistance and advice for Forces families