The (Military Pension) X-Factor Explained

A brief article to help you understand that ‘extra’ cash in your monthly pay.

What is the X-Factor?

It is an addition to basic pay that recognises the particular challenges of military life.

Brief history

The X-Factor was introduced in 1970.

Male soldiers received 5% whilst female soldiers received 1%.

The rates were not equalised until 1991.

What is the Rate?

Currently set at:

  • 14.5% for Regulars;
  • 5% for part-time Reservists.

How Often is it Reviewed?

It is assessed every five years by the Armed Forces Pay Review Body, with the next assessment due in 2023.

How is the Rate of the X-Factor Deteremined?

The X-Factor is based on 13 different components that are classed as either advantages or disadvantages of Service life relative to civilian life, which include:

  • Advantages:
    • Travel opportunities
    • Job security.
    • Promotion prospects.
  • Disadvantages:
    • Danger: The risk of death and physical or mental injury is higher in the military.
    • Long hours: Personnel are contracted to be available for duty 24 hours a day for 365 days per year, but are not eligible for overtime or shift premiums.
    • Turbulence: The disruption to family and social life caused by the unpredictability of a military job.
    • Loss of annual leave: Operations, exercises, and weekend duties can make it difficult for personnel to use all of their leave entitlement.
    • Absence from family: This relates to periods of less than seven days. Anything over this is covered by the longer separation allowance.

The X-Factor is a reflection of the net balance of positives versus negatives of military life.

Pensions and the X-Factor

Unlike allowances, the X-Factor is pensionable.

For example, for a Regular Lance Corporal (OR-3 supplement one) £83 of their £570 pension for 2019/2020 would come from the X-Factor.

However, there would be no reduction to pay because their pension is non-contributory.

What about those Downgraded?

The X-Factor is paid on a through-career basis, so there are likely to be periods when the factors outlined above apply more, or less, than at other times, including when an individual is downgraded.

Further, personnel do not choose to be downgraded and in most cases, for example musculoskeletal injuries, it is military service that has caused the problem.

The MOD suggests there are more appropriate means of encouraging personnel back to full deployability, for example medical and welfare provisions.

A career average is considered preferable to a sliding scale of X-Factor, as everyone benefits.

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