Armed Forces Pension Scheme (AFPS) 2015 Explained: 2026 Guide
Most serving personnel now build up pension under AFPS 2015, a career average scheme with an Early Departure Payment bridging the gap before pension age. Here's how it compares with the legacy AFPS 1975/2005 schemes.
Overview of the Armed Forces Pension Scheme
Serving members of the UK armed forces build up an occupational pension through the Armed Forces Pension Scheme. Following the wider 2015-era public service pension reforms, most current service builds up under AFPS 2015, a career average revalued earnings (CARE) defined benefit scheme, replacing the final-salary-style AFPS 1975 and AFPS 2005 for new accrual from that date.
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Open Pension calculatorA rare feature: no employee contributions
Unlike the LGPS, NHS Pension Scheme, Teachers' Pension Scheme, and most other major UK public service pension schemes, AFPS is non-contributory — there is no employee contribution deducted from service pay. The scheme is funded entirely by the Ministry of Defence, reflecting the unique nature of military service and its associated risks.
The Early Departure Payment (EDP)
Because military careers frequently end well before typical retirement age (often through choice, sometimes through medical discharge or redundancy), the scheme includes an Early Departure Payment (EDP) mechanism for personnel who leave before their Normal Pension Age but meet minimum age and service conditions.
| Feature | Detail |
|---|---|
| Purpose | Bridges the financial gap between leaving service and the occupational pension coming into payment |
| Components | A tax-free lump sum, plus an ongoing income paid until the pension itself starts |
| Qualifying conditions | Minimum age and minimum length of service, varying by scheme version (1975/2005/2015) |
Normal Pension Age
| Scheme | Normal Pension Age |
|---|---|
| AFPS 1975 | Immediate pension typically available earlier, varying by rank/service length (legacy scheme rules) |
| AFPS 2005 | Normal Pension Age 55, with EDP potentially available from an earlier point |
| AFPS 2015 | Normal Pension Age 60, with EDP support available for those leaving earlier subject to conditions |
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Open State Pension Forecast calculatorThe McCloud remedy for armed forces personnel
As with judges, firefighters, and other public service scheme members, the transitional protection given to more senior or longer-serving personnel when AFPS 2015 was introduced — allowing them to remain in their legacy scheme rather than move to the new CARE scheme — was found to be unlawfully age discriminatory.
How benefits build up under AFPS 2015
Each scheme year, a proportion of pensionable pay is added to the member's pension account, with the accumulated total revalued annually (broadly in line with earnings or prices depending on the specific revaluation rule for that year) — the standard structure for a CARE scheme, similar in principle to the LGPS, NHS, and Teachers' schemes, but distinguished by being non-contributory and by the EDP bridging arrangement.
Lump sum and tax treatment
Members can typically commute part of their pension for a tax-free lump sum, within the same HMRC Lump Sum Allowance limit (£268,275 for 2026/27) that applies to other registered pension schemes. Once in payment, both the ongoing pension and any EDP income are taxed through PAYE in the normal way.
Armed forces pension and the State Pension
The occupational armed forces pension (including any EDP) is entirely separate from the State Pension, which personnel build up through their National Insurance record in parallel — most veterans will therefore receive both an occupational armed forces pension and a State Pension in retirement.
Practical points for serving and former personnel
- Check which scheme(s) your service falls under, and whether you're affected by the McCloud remedy deferred choice.
- Understand the EDP conditions carefully if you're considering leaving service before Normal Pension Age — the minimum age/service qualifying conditions matter significantly for your financial planning.
- Request an up-to-date benefit statement covering all relevant scheme periods before making decisions about leaving service or retirement.
- Take independent financial advice given the complexity of comparing legacy and 2015 scheme benefits, and the interaction with EDP.
Use the pension calculator as a general planning tool, alongside official Armed Forces Pension Scheme guidance for scheme-specific figures.
Frequently asked questions
What pension scheme do most serving armed forces personnel belong to?
Most personnel who joined from April 2015 onwards, and much of the service of longer-serving personnel from that date, build up pension under the Armed Forces Pension Scheme 2015 (AFPS 15), a career average revalued earnings (CARE) scheme, subject to McCloud remedy choices for the transition period.
What is an Early Departure Payment (EDP) in the armed forces pension context?
An Early Departure Payment is a tax-free lump sum plus an ongoing income paid to personnel who leave the armed forces before their Normal Pension Age but have met minimum service and age conditions, bridging the gap financially until the occupational pension itself comes into payment.
What is the Normal Pension Age under AFPS 2015?
The Normal Pension Age under AFPS 2015 is generally 60, later than the earlier immediate pension ages available under some legacy schemes, though EDP arrangements can provide earlier financial support for those who leave service before reaching it.
Do armed forces personnel pay contributions into their pension?
No — uniquely among most major UK public service pension schemes, AFPS is entirely non-contributory for personnel. There is no employee contribution deducted from service pay; the scheme is funded entirely by the Ministry of Defence.
What is the McCloud remedy for armed forces pensions?
As with other public service schemes, transitional protection given to more senior/longer-serving personnel when AFPS 2015 was introduced was found to be unlawfully age discriminatory. Affected personnel get a choice between legacy scheme (AFPS 1975 or AFPS 2005) and AFPS 2015 benefits for the remedy period (broadly April 2015 to March 2022).
Is armed forces pension income taxable?
Yes. Once in payment, armed forces pension income (including Early Departure Payment income) is taxed as pension/employment-type income through PAYE, and is subject to the same Annual Allowance and Lump Sum Allowance rules as other registered pension schemes.
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