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31 Jul 2025
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Money & Finances for Veterans and Military Families
Managing money is never simple — and for the Armed Forces community, it often comes with extra layers of complexity. Serving personnel have to manage pay, allowances and benefits that don’t always fit civilian models. Reservists juggle two incomes and the challenges of being away from civilian jobs. Veterans face the transition into civilian finances, where pensions and compensation schemes can be complex. And families — so often the unseen backbone of military life — are impacted at every stage, from childcare costs to housing, debt, and bereavement benefits.
This page is designed as your complete guide to money and finances for veterans and military families in the UK.
Benefits & Entitlements
Serving personnel receive a range of allowances that can help with living costs, childcare, and relocation. Reservists are entitled to travel and training allowances, as well as employment protections if mobilised. Veterans and their families may access mainstream benefits such as Universal Credit or Housing Benefit, but also receive special recognition under the Armed Forces Covenant. Councils must ensure veterans are not disadvantaged when applying for housing or support because of frequent moves or time spent in service accommodation.
Families can also apply for childcare support, bereavement benefits, or council tax discounts. The challenge is often navigating multiple systems — the MOD, the DWP, and local councils — all of which have different rules.
Pensions & Compensation
Pensions can be one of the trickiest areas to navigate for the Armed Forces community. Most serving personnel build entitlement through the Armed Forces Pension Scheme (AFPS), but the details depend on when you served. There are three main schemes — AFPS 75, AFPS 05 and AFPS 15 — each with different rules on how benefits are calculated, when they can be claimed, and what support is available for families through survivor pensions. Legacy schemes are now closed to new entrants, and recent “remedy” changes give some personnel options about how their service between 2015 and 2022 is treated.
Alongside pensions, there are two key compensation schemes for those injured or made ill through service: the War Pension Scheme (covering service before 6 April 2005) and the Armed Forces Compensation Scheme (AFCS) (covering service on or after that date). Both provide financial recognition — and in some cases lifelong support — for veterans and their families.
Understanding how pensions and compensation interact with each other, and with civilian benefits, is essential. Many service leavers don’t realise their full entitlements, which means valuable financial support can go unclaimed.
Debt Help & Money Support
Life in the Forces can be financially challenging. While serving, allowances and military pay structures can feel unfamiliar. For veterans and families, the transition into civilian pay cycles and the sudden loss of MOD housing allowances can create gaps that lead to debt. Reservists too may struggle when balancing fluctuating civilian income with periods of mobilisation.
The good news is that there are specialist services that understand these pressures. Many organisations and Service charities provide free, confidential debt advice, with some advisers trained in veteran issues and many can provide grants to help cover essential costs or bridge financial gaps. MOD resettlement programmes also offer budgeting workshops, helping service leavers and families adjust their finances to civilian life.
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