The Armed Forces Pension Scheme: What Serving Personnel, Veterans and Families Really Need to Know

If you’ve served in the Armed Forces, or you’re part of a military family, your pension is one of the most valuable benefits you’ll ever receive. Yet it’s also one of the most misunderstood.

The Armed Forces Pension Scheme (AFPS) works very differently from civilian workplace pensions. Understanding how it operates, what you’re entitled to, and how it fits into your future plans can make a real difference to your long-term financial security.

This blog breaks it down in plain English — and explains why it matters now, not just at retirement.

Why the Armed Forces Pension Is Different

Unlike most civilian pensions, you don’t contribute directly to the Armed Forces Pension Scheme. Your pension is funded by the Ministry of Defence and earned through your service.

That means:

• Your pension builds automatically while you serve
• The value depends on length of service and pay, not investment performance
• Benefits often include tax-free lump sums and survivor pensions

It’s a major part of your overall reward package — and one that’s easy to underestimate if you don’t understand the detail.

Which Pension Scheme Are You In — and Why It Matters

The Armed Forces Pension Scheme has changed over time. Which version you’re in affects when you can access your pension, how much you receive, and what your family may be entitled to.

Most people today fall under AFPS 15, a Career Average Revalued Earnings (CARE) scheme.

In simple terms:

• Your pension builds each year based on your pay
• It increases with inflation while you serve
• Normal pension age is linked to State Pension age
  Early Departure Payments (EDP) may be available if you leave before pension age

If you served during transition periods, you may also be affected by recent pension remedy changes — which makes checking your position especially important.

Common Pension Questions (Answered Clearly)

Can I access my Armed Forces pension early?

Possibly. Depending on your scheme and length of service, you may qualify for Early Departure Payments, but taking benefits early usually reduces the amount paid later.

Is my Armed Forces pension taxable?

Yes. Pension income is taxable like other income, although some lump sums may be tax-free depending on scheme rules.

What happens to my pension if I die?

All Armed Forces pension schemes include survivor benefits for eligible partners and dependent children — one of the most valuable aspects of the scheme.

Does my Armed Forces pension affect my State Pension?

No. Your Armed Forces pension is separate from your State Pension and sits alongside it.

Why Understanding Your Pension Matters Before You Leave Service

Many veterans only start thinking seriously about their pension at the point of transition, or later, when options may already be limited.

Understanding your pension early helps you:

• Plan realistic retirement and career transitions
• Avoid unexpected tax or income issues
• Protect your family’s financial future
• Make informed decisions about leaving service or staying longer
  

Your pension can also provide stability and flexibility, supporting retraining, self-employment or a second career after service.

5 Practical Pension Tips for Serving Personnel and Veterans

1. Request a pension forecast
   Know what you’re entitled to before making big decisions.
2. Understand survivor benefits
   Make sure your family knows what support exists if the worst happens.
3. Factor pensions into career planning
   Your pension can underpin new opportunities, not restrict them.
4. Be aware of tax implications
   Especially if you have multiple income streams post-service.
5. Use Forces-friendly advice
   Organisations like the Forces Pension Society and Veterans UK specialise in Armed Forces pensions and understand the system inside out.

Where to Get Clear, Trusted Pension Information

The Armed Forces Pension Scheme can feel complex — but you don’t have to figure it out alone.

Troopr’s Armed Forces Pension Scheme Explained guide breaks down:

• The different pension schemes
• How benefits work
• What serving personnel, veterans and families should know

Your Armed Forces pension is more than a retirement pot — it’s a foundation for your future. Understanding it early puts you and your family in a stronger position, whatever your next chapter looks like.

Read the full guide and explore Forces-friendly financial support on Troopr to compare your options and plan with confidence.