AFPS 1975: Officers to have at least 2 years' Commissioned service and have 9 relevant years of reckonable service from age 21.
Armed Forces Pension Schemes 75, 05 and 15
An individual will be eligible to receive pension benefits provided they have completed at least 2 years. If an individual has at least 2 years qualifying service and they serve until age 60 they will be entitled to claim their pension immediately.
The tax-free lump sum is £26,992.92. The most they can commute is the difference between the 22 year lump sum for a Sergeant (£34,932) and the lump sum for a Sergeant with 37 years service (£53,220) – so £18,288.
Your pension can be paid from age 55. It is also possible to access benefits earlier via the payment of an early departure payment (EDP) if you have at least 18 years of service and have reached age 40.
At age 55 the income is increased to 75% of the value of the preserved pension and CPI increases are applied. The EDP income continues until age 65. Because the pension and EDP come from separate schemes and individual is permitted to draw his pension early and have it paid at the same time as his EDP.
Pensions and EDP income count as 'earned income' – they are normally taxable but National Insurance Contributions (NICs) are not due in respect of them.
The annual uprating of war pensions and allowances for 2023 will take place from the week beginning 10 April. Rates for 2023 are increasing by 10.1% in accordance with the announcement by the Chancellor of the Exchequer in the autumn statement on 17 November 2022.
When a member of the armed forces reaches their retirement age, they receive one of the most generous pensions available in the UK. This fairly reflects the unique sacrifice they have provided their country throughout their career.
Career path and progression
When you join the army, you sign up for 4 years. You can leave at any time after this as long as you give 12 months' notice. If you want to stay you can extend your 4-year contract. With training and experience you could move up through the ranks or into a specialist unit like the commandos.
When you leave the regular armed forces, you will be entitled to a lump sum payment provided you: have served for at least 12 years (from date of entry). are not entitled to an EDP, an ill-health award or an immediate pension from a legacy pension scheme. have not previously received a Resettlement Grant.
The Ministry of Defence (MOD) defines a veteran as: “anyone who has served for at least one day in Her Majesty's Armed Forces (Regular or Reserve), or Merchant Mariners who have seen duty on legally defined military operations.” Under the definition, veterans have already left the Armed Forces.
The Veterans UK guidance states that you may be required to share anything between 1% and 100% of your military pension with your former spouse. A military pension is extremely valuable, so think of this in terms of protecting your future income rather than being unfair to your former spouse.
Joining aged 18 or over
If you are 18 or over and join the army for the FIRST time, then: You can leave in the first THREE MONTHS (but NOT in the first six weeks). After the first three months you have no right to leave until you have served for FOUR YEARS.
Can you quit the army in the UK? Technically you can quit the army in the UK. The only condition is that you need to get permission to leave the army beforehand, or you risk breaking the law. It's also worth mentioning that there are different rules for quitting the army if you're under or over 18.
Yes, you can sell your pension! But there are some considerations to make before you do.
Under AFPS 75, members of the Armed Forces with the same rank and same number of years of reckonable service are normally awarded the same pension, regardless of their actual pay either at retirement or discharge, or earlier in their career. This is known as the representative pay rate for the rank.
Private: £21,425 a year. Lance Corporal: £28,351 a year. Corporal: £33,065 a year. Sergeant: £37,198 a year.
The Universities Superannuation Scheme (USS) is the largest pension fund in the UK, with £90,79 billion in assets under management (AUM) as of March 2022. It is a private pension scheme that serves employees in the higher education sector, including universities and research institutions.
The rise means that those qualifying for a full new State Pension will now receive £203.85 a week (up from £185.15). And those who reached State Pension age before April 2016, who are on the older basic State Pension, will now receive £156.20 – up from £141.85.
The state pension increased more than 10% in April 2023. The full basic amount pensioners receive rises every year in line with wider economic trends via a system known as the triple lock. Whether you're entitled to the full state pension and how much you will get depends on your age and your national insurance record.
You can live abroad and still be a UK resident for tax, for example if you visit the UK for more than 183 days in a tax year. Pay tax on your income and profits from selling assets (such as shares) in the normal way.
You'll receive 2.5% of your final monthly basic pay for every year of service. For example, if you retire after 40 years of active service, then you can expect to receive 100% of your monthly base pay as your retirement pension.