Future Armed Forces Pension Scheme: Key Points

Cash, LockedThe main features of the new scheme are (new features in bold):

  • One scheme for all – including Reservists.
  • A Career Average scheme (rather than final salary).
  • No personal contributions.
  • A pension accrual rate of 1/47th for all.
  • Benefits earned under the new scheme while serving will be increased (‘revalued’) annually by an average earnings index.
  • The Deferred Pension age (known as the Preserved Pension age in the current schemes) will be linked to the State Pension Age.
  • An Early Departure Payment (EDP), consisting of a lump sum and income stream, with further work being undertaken to investigate the potential for allowing greater flexibility in how the EDP is taken.
  • Normal Pension Age of 60, though pension can be taken earlier (from 55), actuarially reduced from the Deferred Pension Age, as it will be paid for longer.
  • No automatic pension lump sum, but with the option of generating a lump sum by commuting (reducing), the pension income.
  • Pensions in payment and Deferred Pensions to increase in line with the Consumer Prices Index (CPI).
  • Dependants’ benefits, ill-health pensions and death-in-service benefits in line with AFPS 05 provisions.
  • Abolition of abatement if an individual returns to the Services after retirement.
  • A break of five years or less will be treated as continuous service for indexation.
  • Annual pension forecast statements.
  • A Government commitment that there should be no further changes to public service pensions for the next 25 years.


MOD (Ministry of Defence) (2013) A New Armed Forces Pension Scheme: Outline Scheme Design. London: MOD.


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