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🎖️ Armed Forces Pension Advice

Pension Advice for Armed Forces Understand Your Military Pension

The Armed Forces Pension Scheme is unique and complex. Whether you're serving, transitioning to civilian life, or a veteran, understanding your pension entitlement is crucial for your financial future.

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Armed Forces Pension Advice
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What Is Armed Forces Pension Advice?

Armed Forces pension advice is specialist financial guidance for serving military personnel, veterans, and their families who need help understanding and maximising their military pension benefits. The Armed Forces Pension Scheme (AFPS) has undergone several major changes – from AFPS 75 to AFPS 05 and the current AFPS 15 – and many service members find themselves with entitlements across multiple schemes with different rules, retirement ages, and benefit calculations.

Unlike most civilian workplace pensions, the AFPS is an unfunded defined benefit scheme backed by the government. This means your pension is calculated based on your rank, length of service, and the specific scheme rules rather than investment performance. However, the complexity of having benefits across different scheme generations, combined with unique military features like Early Departure Payments (EDP), lump sum commutation options, and resettlement grants, means professional advice is often essential.

An FCA-regulated pension adviser with military pension experience can help with:

  • Understanding your AFPS entitlements – calculating your projected pension across AFPS 75, AFPS 05, and AFPS 15 including any transitional protections you may have.
  • Early Departure Payment planning – understanding how EDP works if you leave after 18 years of service but before pension age, and how it interacts with your full pension.
  • Commutation decisions – whether to take a tax-free lump sum in exchange for a reduced annual pension, and how the commutation factor affects your long-term income.
  • Resettlement and transition planning – coordinating your military pension with civilian employment pensions and other savings as you leave the forces.
  • Pension sharing on divorce – military pensions are often the most valuable asset in a divorce and require specialist valuation using Cash Equivalent Transfer Values (CETV).
  • Additional Voluntary Contributions (AVCs) – whether topping up your military pension through AVCs or a separate personal pension is the better strategy.
Key fact: The AFPS 15 scheme provides a pension based on 1/47th of your pensionable earnings each year, revalued annually by CPI. A service member earning £35,000 per year who serves for 20 years would build up a pension of approximately £14,900 per year (before commutation), payable from State Pension age.
Scheme Comparison

AFPS 75 vs AFPS 05 vs AFPS 15

The Armed Forces pension system has evolved significantly. Understanding which scheme your benefits fall under is essential for planning.

FeatureAFPS 75AFPS 05AFPS 15
Pension typeFinal salaryFinal salaryCareer average (CARE)
Normal pension age55 (or Immediate Pension after 16 yrs)55 (officers) / 55 (other ranks)State Pension age (currently 67)
Accrual rate1/70th per year1/70th per year1/47th per year
Early Departure PaymentImmediate Pension availableEDP after 18 years serviceEDP after 20 years service
Lump sumAutomatic 3x pensionOptional commutationOptional commutation
Death benefitsSpouse pension onlySpouse/partner pensionSpouse/partner/dependant pension
Important: Many service members who joined before 2015 have transitional protection that preserves some AFPS 75 or AFPS 05 benefits. Following the McCloud remedy, affected members can choose which scheme benefits to take for the remedy period (2015–2022). This decision has significant financial implications and professional advice is strongly recommended.
Who Is It For?

Who Benefits from Armed Forces Pension Advice?

Military pensions are among the most valuable but complex benefits in the UK. If any of these apply to you, specialist advice could be invaluable.

🎖

Approaching End of Service

Whether you are completing your commission or reaching your engagement end, understanding your EDP entitlement, resettlement options, and how to bridge the gap between military and State Pension age is critical.

Plan your transition 2-3 years ahead
📊

McCloud Remedy Decisions

If you served between 2015 and 2022 and were moved from AFPS 75 or AFPS 05 to AFPS 15, you need to choose which scheme benefits to take for the remedy period. This is a one-time decision with lasting impact.

Get professional analysis before choosing
💰

Considering Commutation

Deciding whether to commute part of your annual pension for a tax-free lump sum involves complex calculations about life expectancy, tax, and income needs. The wrong choice could cost you tens of thousands over your lifetime.

Run the numbers with a specialist
🤝

Going Through Divorce

Military pensions must be valued using a CETV for divorce proceedings, but the standard CETV may not reflect the true value of benefits like EDP. Pension sharing orders for AFPS require specialist legal and financial input.

Ensure your CETV is correctly calculated
🏠

Building Civilian Pension Savings

After leaving the forces, coordinating your AFPS benefits with a new employer pension, SIPP, or LISA requires careful planning to avoid exceeding annual or lifetime limits and to maximise tax relief.

Coordinate military and civilian pensions
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Families and Dependants

Understanding what your family would receive if you die in service or after retirement varies significantly across AFPS 75, 05, and 15. Ensuring your nomination forms are up to date and your family is protected is essential.

Review your death-in-service benefits

Need help understanding your Armed Forces pension?

Get matched with an FCA-regulated adviser who specialises in military pensions. Free matching, no obligation.

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Costs Explained

How Much Does Armed Forces Pension Advice Cost?

Specialist military pension advice costs vary depending on the complexity of your situation. Here are typical fees you can expect.

£500–£2,500
Initial Advice
One-off fee for a comprehensive review of your AFPS entitlements, commutation analysis, EDP calculations, and a personalised retirement plan. Some advisers charge more for McCloud remedy analysis.
0.5%–1%/year
Ongoing Management
Annual fee for ongoing management of any additional pension savings (SIPPs, ISAs) you hold alongside your AFPS benefits. Not needed for the AFPS itself as it is managed by the scheme.
Worth knowing: Through PensionHelper, our matching service is free with no obligation. Military pension specialists understand the unique features of AFPS and can save you thousands through correct commutation decisions, McCloud remedy choices, and tax-efficient transition planning.
Simple Process

How It Works

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We connect you with an FCA-regulated pension specialist suited to your needs.

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Your adviser reviews your situation and recommends the best course of action.

Real Reviews

What Our Customers Say

James M.
James M.
Hampshire • Armed Forces Pension Advice
★★★★★
“Finally understand my pension”

After 22 years in the Royal Engineers, I had benefits across AFPS 75 and AFPS 15. The adviser laid everything out clearly and showed me my EDP was worth far more than I realised. Retired with confidence.

Sarah K.
Sarah K.
Wiltshire • Armed Forces Pension Advice
★★★★★
“McCloud decision made easy”

The McCloud remedy choice was keeping me up at night. My adviser ran all the scenarios and showed me that staying with AFPS 05 for the remedy period would give me £2,400 more per year in retirement.

David R.
David R.
North Yorkshire • Armed Forces Pension Advice
★★★★★
“Saved thousands on commutation”

I was going to commute the maximum lump sum but the adviser showed me that keeping the full pension would be worth £47,000 more over my expected lifetime. That one piece of advice was priceless.

Emma T.
Emma T.
Oxfordshire • Armed Forces Pension Advice
★★★★★
“Divorce pension sorted properly”

Going through a divorce as a serving officer was stressful enough. The pension adviser worked with my solicitor to ensure my AFPS 05 benefits were valued correctly. The standard CETV was undervaluing my EDP significantly.

Mark P.
Mark P.
Lincolnshire • Armed Forces Pension Advice
★★★★★
“Smooth transition to civvy street”

Leaving after 24 years felt daunting financially. My adviser created a plan that bridged the gap between my EDP and State Pension age using ISA drawdowns. I now have a clear monthly income plan for every year.

Lisa H.
Lisa H.
Plymouth • Armed Forces Pension Advice
★★★★★
“Protected my family properly”

As a naval spouse, I wanted to understand what I would receive if the worst happened. The adviser reviewed the death-in-service benefits and we topped up with additional life insurance to fill the gap. Peace of mind.

Learn More

Related Guides

Explore our guides for more detailed information on Armed Forces pension planning and related topics.

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Pension Transfer Guide

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Complete guide to planning your retirement income

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Over 50s Pension Advice

Specialist guidance for the over 50s
Got Questions?

Armed Forces Pension Advice: Frequently Asked Questions

AFPS 15 is the current military pension scheme, introduced on 1 April 2015. It is a Career Average Revalued Earnings (CARE) scheme where you build up 1/47th of your pensionable earnings each year. Unlike the older AFPS 75 and AFPS 05 schemes, the normal pension age is linked to State Pension age (currently 67). Benefits are revalued each year in line with CPI inflation.
Under AFPS 15, the normal pension age is State Pension age (currently 67), not 55. However, if you have preserved benefits under AFPS 75 or AFPS 05, those may be payable from age 55 or earlier. Additionally, the Early Departure Payment (EDP) is available from age 40 with at least 20 years of qualifying service, providing a tax-free lump sum and income until your deferred pension begins.
The Early Departure Payment (EDP) in AFPS 15 is available to service members who leave after at least 20 years of qualifying service and have reached age 40. It provides a tax-free lump sum of 2.25 times your annual EDP income, plus an annual income equal to roughly half your accrued pension. This bridges the gap until your full pension becomes payable at State Pension age.
The McCloud remedy gives eligible members who were transferred to AFPS 15 between 2015 and 2022 the right to choose whether their benefits for that period are calculated under their legacy scheme (AFPS 75 or AFPS 05) or AFPS 15. This is a significant decision that depends on your rank, pay progression, and retirement plans. Getting professional advice before making this choice is strongly recommended.
Commutation allows you to trade part of your annual pension for a tax-free lump sum. The commutation factor determines how much lump sum you receive per pound of annual pension given up. Whether this is worthwhile depends on your tax position, life expectancy, other savings, and income needs. A pension adviser can model both scenarios to show you the long-term financial impact.
AFPS benefits cannot be transferred out to a private pension scheme. This is because the AFPS is an unfunded public service pension scheme. However, you can build up additional pension savings alongside your AFPS through a SIPP, workplace pension with a civilian employer, or Additional Voluntary Contributions (AVCs). An adviser can help you coordinate these.
Military pensions are considered a marital asset in divorce proceedings. The court can issue a Pension Sharing Order that transfers a percentage of your CETV to your ex-spouse. The AFPS will calculate a CETV for divorce purposes, but it may not fully reflect the value of benefits like EDP. Getting specialist financial advice alongside legal advice is essential.
Under AFPS 15, after 22 years your pension would be 22/47ths of your average career earnings (revalued by CPI). For example, if your average pensionable pay was £38,000, your annual pension would be approximately £17,787 per year at State Pension age. Under AFPS 75, 22 years would give you 22/70ths of your final salary. The exact amount depends on your scheme, rank, and pay.
Under AFPS 15, members do not make direct pension contributions – it is a non-contributory scheme fully funded by the Ministry of Defence. This is a significant benefit compared to civilian schemes where employees typically contribute 3-8% of salary. However, if you want to build additional savings, you can set up AVCs or a personal pension separately.
A Sergeant leaving after 22 years under AFPS 15 with average pensionable pay of around £38,000 would receive an annual pension of approximately £17,787 at State Pension age. They would also qualify for EDP if they are over 40, providing an income of roughly £8,900 per year plus a tax-free lump sum of approximately £20,000 on departure. Exact figures depend on individual circumstances.
Yes. If you are medically discharged from the armed forces, you may be entitled to an Enhanced Ill-Health Pension paid immediately regardless of age or length of service. The amount depends on the severity of your condition and is assessed by the Service Medical Board. Additionally, you may receive a War Pension or Armed Forces Compensation Scheme payment for injuries attributable to service.
Under AFPS 15, a surviving spouse or civil partner receives a pension equal to roughly 62.5% of the member’s accrued pension. Under AFPS 05, it is approximately 62.5% of the member’s pension. Under AFPS 75, only legally married spouses are eligible, and the rate varies. Eligible children also receive a pension. Death-in-service lump sums of 4x salary are payable across all schemes.
Yes. All AFPS pensions are increased annually in line with the Consumer Prices Index (CPI) once in payment. AFPS 15 CARE benefits are also revalued by CPI during the accrual phase. This means your pension maintains its purchasing power over time, which is a significant advantage over many private sector pension schemes that may have limited or no inflation protection.
AVCs allow you to build up additional pension savings on top of your AFPS benefits. Whether AVCs or a separate SIPP is better depends on your tax position, the AVC scheme charges, and your investment preferences. AVCs benefit from the same tax relief as any pension contribution. An adviser can compare the options and recommend the most cost-effective approach for your situation.
Through PensionHelper, we match you with FCA-regulated advisers who have specific experience with Armed Forces pension schemes. It takes 60 seconds to answer a few questions about your situation, and we will connect you with a specialist who understands AFPS 75, AFPS 05, AFPS 15, EDP, commutation, and the McCloud remedy. Our matching service is free with no obligation.

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