Military & army pensions explained

As an armed forces veteran, you are entitled to a military service pension when you retire or reach a certain age.

Exactly which one you will receive and when depends on a number of key factors, such as time served, your rank, and whether you were a regular or a reservist.

Military pensions are typically defined benefit schemes, which offer a predictable retirement income.

There are four pension schemes that you could have rights to, so it’s important to understand which one you will receive.

What is the military pension and how does it work? 

Your armed forces pension scheme is designed to provide you with an income after you leave the armed forces or retire.

It won’t affect your state pension but will depend on your rank, the length of time you served and the age you were when you joined.  

Here’s where it gets a little more complicated, because there are a number of different schemes, which need explaining separately.

Essentially though, there are four pension schemes that you could have rights to. 

• AFPS 75: This pension is designed for regulars only. You’ll need a minimum of two years’ service to receive any pension. As a commissioned officer you would receive immediate pension entitlement on leaving after 16 years of service. As a non-commissioned person, you could leave with immediate pension entitlements after 22 years of service. Entry to this scheme closed in April 2005.
• AFPS 05: Like AFPS 75, this scheme is for regulars only, and you would need to have completed a minimum of two years’ service to receive any pension. Here there is no immediate pension payable if you leave before the age of 55. There is, however, an early departure payment income stream and lump sum that you would be entitled to between the ages of 40 and 55, if you have completed at least 18 years of service. Entry to AFP 05 closed in March 2015.
• RFPS 05: Designed exclusively for full-time reservists, only one day of service is required to qualify for this pension. No immediate pension is paid to you under the age of 60 and there are no early departure awards either. All periods of service are then payable once you reach 60 if you leave full-time reserve service at this age.
• AFPS 15: For all regulars and reservists, you need to have served a minimum of two years in the scheme to be entitled to pension payments. The rule is the same for all regular and reserve personnel. No immediate pension is paid if you leave under the age of 60, but there is an early departure income stream and lump sum that’s payable to regular leavers only. You’re entitled to this between the ages of 40 and 60 if you’ve completed 20 years of service. 

There was also a separate pension scheme for Full Time Reservists called FTRS 97, open between April 1997 and April 2006. The scheme was essentially the same as the AFPS 75 scheme above. 

AFPS 15 is a career average revalued earnings scheme (CARE), which is a form of defined benefit pension scheme offered by employers.

In a CARE scheme, your pension is based on your average earnings throughout your career, rather than your salary at retirement.

All the other schemes are based on the final salary model except for AFPS 75, which is a slightly different representative salary pension.

How much will my army pension be? 

The exact amount you receive on retirement will depend on which of the schemes you are entitled to, your rank, your length of service and how old you were when you joined. 

To get a forecast of just how much pension you will receive, based on your individual circumstances and status, use the armed forces pensions calculator on GOV.UK. 

What is a war widow’s pension?  

If your husband, wife or civil partner died as a result of serving in the armed forces, you may well be entitled to a War Widow’s or War Widower’s pension, based on the pay they were receiving. 

For you to qualify, they must have served in the armed forces before 6 April 2005, however, you might still be eligible if they died from an illness or injury at a later date. 

Here are the eligibility criteria for receiving a Widow’s or Widower’s pension at a glance: 

• Your husband, wife or civil partner died as a result of serving in HM Armed Forces before 6 April 2005
• They were a civil defence volunteer or civilian who died as a result of the war between 1939-1945
• They were a merchant seaman, member of the naval auxiliary service, or a coastguard who died as a result of injury or disease during a war or as a prisoner of war
• They died because they were serving members of the Polish Force under British Command from 1939 – 45, or serving in the Polish Resettlement Forces
• They were receiving War Pensions Constant Attendance Allowance when they died, or would have been, were they not in hospital at the time
• They were receiving a War Disablement Pension at 80% or more plus Unemployability Supplement 

What about compensation? 

If your partner was injured, become ill or died after the 6 April 2005 deadline, you can make a claim through the Armed Forces Compensation Scheme (AFCS). 

AFCS awards are either a tax-free lump sum or a Guaranteed Income Payment, which is a tax-free, index-lined monthly payment. The rules of the scheme and value of awards are decided by Parliament and don’t affect any other cover you might have, such as life assurance. 

AFCS covers all regular service personnel, including the Royal Gibraltar Regiment, and all reserves, and you can claim whether you’re currently serving or have left HM Armed Forces. 

It’s important to remember that your claim must be made within seven years of the earliest of these dates:  

• The date of the incident or the date on which an existing illness or injury was made worse by service
• The date when you or your partner first asked for medical advice about an illness or the date of discharge 

The AFCS scheme, while providing a lump sum or GIP, does not affect other benefits such as universal credit. You can find a claim form for AFCS on GOV.UK.

When you’ve dedicated your working life to the armed forces, it’s important to make sure you get the pension or compensation that you deserve.

Organisations such as the AFCS and Citizens Advice are helpful, but it may be a good idea to consult a financial adviser if you’re still unsure.

Get expert financial advice

Understanding your military pension entitlements is essential for effective retirement planning. 

Whether you fall under AFPS 75, AFPS 05, RFPS 05, or AFPS 15, or if you are considering compensation through the AFCS, having a clear grasp of your benefits will help you make the most of your service.

Ensuring you know all the details will help you secure the financial support you’ve earned.

Let Unbiased match you with a financial adviser for expert financial advice on optimising your military pension benefits and navigating compensation options effectively. 

If you found this article useful, you might also find our article on civil service pensions informative, too.