UK Armed Forces Pension Calculator

If you leave the Armed Forces before retirement age, your options depend on your scheme and length of service:

AFPS75:

• If you leave with less than 2 years' service, you can receive a refund of your notional contributions
• With 2+ years but less than qualifying service for an immediate pension, you'll receive a preserved pension payable at age 60 or 65
• Officers with 16+ years' service or Other Ranks with 22+ years' service receive an immediate pension and tax-free lump sum

AFPS05:

• If you leave with 2+ years' service, you'll receive a preserved pension payable at age 65
• If you leave with 18+ years' service and are at least age 40, you may be eligible for Early Departure Payments

AFPS15:

• If you leave with 2+ years' service, you'll receive a deferred pension payable at your State Pension age
• If you leave with 20+ years' service and are at least age 40, you may be eligible for Early Departure Payments

Additionally, regardless of scheme, you may be eligible for a Resettlement Grant if you serve for at least 12 years and don't qualify for immediate pension benefits.

When you transitioned to AFPS15, your existing pension rights under AFPS75 or AFPS05 were protected as follows:

• Protected rights - Benefits earned in your previous scheme (AFPS75 or AFPS05) up to the transition date are preserved under the rules of that scheme
• Final salary link - For AFPS75/05 benefits, the final salary used in calculations will be your salary when you leave service, not when you transitioned to AFPS15
• Two-part pension - You'll have a pension with two parts: your protected rights from your previous scheme and your AFPS15 pension
• Different payment ages - Each part may become payable at different ages depending on scheme rules

Some service personnel had full protection and remained in their original scheme if they were within 10 years of their normal pension age on 1 April 2012. Others had transitional protection and moved to AFPS15 at a later date.

Following the McCloud judgment in 2020, members who were in service on or before 31 March 2012 and on or after 1 April 2015 will be offered a choice between their legacy scheme benefits or AFPS15 benefits for the remedy period (1 April 2015 to 31 March 2022). This rectifies the age discrimination found in the original transition arrangements.

As a member of the Armed Forces, you have several options to boost your pension benefits:

AFPS15 Added Pension:

You can purchase Added Pension to increase your retirement benefits. For the 2024/25 scheme year, you can buy up to £7,000 of additional annual pension. This can be done either through lump sum payments or regular monthly contributions.

Additional Voluntary Contributions (AVCs):

You can make tax-efficient contributions to an AVC scheme to enhance your retirement savings. These are separate from your Armed Forces pension but complement it.

Personal Pensions:

You can contribute to a personal pension alongside your Armed Forces pension. This could be through a Self-Invested Personal Pension (SIPP) or a stakeholder pension.

Lifetime ISA:

If you're under 40, you can open a Lifetime ISA and contribute up to £4,000 each tax year until age 50, receiving a 25% government bonus on your contributions. This can be used for retirement after age 60.

For personalized advice on which option might be best for your circumstances, consider consulting with an independent financial advisor who specializes in military pensions.

Planning for civilian life using your Armed Forces pension involves several considerations:

1. Understand Your Timeline:

• Know when different elements of your pension become payable
• Identify any potential income gaps between leaving service and pension payments starting
• Plan for Early Departure Payments if eligible

2. Consider Housing Needs:

• Your pension lump sum might help with housing deposits
• Use our UK Mortgage Calculator to see what you might be able to afford
• Factor in the loss of service accommodation when planning

3. Build Additional Savings:

• Your military pension may not fully replace your service income
• Consider supplementary savings using our UK Savings Calculator
• Look into tax-efficient savings options like ISAs

4. Plan for Second Careers:

• Your pension can provide a financial foundation while you establish a civilian career
• Consider how additional income might affect tax on pension payments
• Use career transition services like the Career Transition Partnership (CTP)

5. Consider Total Retirement Planning:

• Your Armed Forces pension is just one element of retirement planning
• Factor in State Pension entitlements
• Use our UK Pension Calculator to model your complete retirement income

For comprehensive financial planning, consider consulting with a financial advisor who specializes in working with ex-service personnel. The Service Personnel & Veterans Agency (SPVA) also provides guidance on pension matters.