Serving members of the Royal Navy, Army, and Royal Air Force build up their pension today under the Armed Forces Pension Scheme 2015 (AFPS 2015), which replaced the older AFPS 1975 and AFPS 2005 schemes for ongoing accrual from April 2015. Military pensions have always had features that set them apart from most other public sector schemes, reflecting the unique shape of a military career — often starting young, involving compulsory or highly structured exit points well before traditional retirement age, and carrying risks that few civilian jobs share. This guide explains how AFPS 2015 works, what makes military pensions distinctive (including the Early Departure Payment), and how the McCloud remedy applies to longer-serving personnel.
What is AFPS 2015?
AFPS 2015 is a career average revalued earnings (CARE) scheme, meaning your pension builds up year by year as a series of slices based on your actual pensionable pay for that year, each revalued annually in line with inflation, rather than being based purely on your pay right at the point you leave service. Personnel who joined from April 2015 onwards are typically members of this scheme from day one, while many who were already serving transitioned in from AFPS 1975 or AFPS 2005, with transitional protection determining exactly when that happened for each individual.
Because military careers often involve leaving service relatively young — whether after a full career or after a shorter engagement — AFPS 2015 is built around benefits that can be accessed at different points, rather than a single fixed retirement age applying uniformly to everyone in the way it might in a typical civilian career average scheme.
The Early Departure Payment — a distinctive military feature
One of the most distinctive features of military pensions, and something with no real equivalent in most civilian public sector schemes, is the Early Departure Payment (EDP). Because so many service personnel leave the armed forces well before State Pension age — sometimes after a full career of 20 years or more, sometimes after a shorter engagement — the scheme provides a form of income bridging for those who leave service after a qualifying number of years but before they're able to draw their full AFPS pension.
Under AFPS 2015, personnel who leave service having completed at least 20 years' service and reached age 40 may qualify for an EDP, made up of a tax-free lump sum and an ongoing income paid until their AFPS pension comes into payment at Normal Pension Age (age 60 under AFPS 2015). The EDP income is designed to bridge what would otherwise be a substantial gap between leaving a military career, often in your 40s, and being able to draw a full pension at 60 — recognising that a military career structure simply doesn't map onto a typical civilian retirement age.
How AFPS 2015 benefits build up
As with other career average schemes, each year of service adds a slice of pension calculated from that year's actual pensionable pay, using an accrual rate set by the scheme rules, with each year's slice revalued annually for inflation once added to your running total. At Normal Pension Age (60 under AFPS 2015), your accumulated pension comes into payment in full, and — as with the police and other public sector schemes — you typically have the option to commute part of your pension for a tax-free lump sum at that point, within limits set by HMRC rules.
Contribution rates and how AFPS 2015 is funded
Unlike the Local Government Pension Scheme, AFPS 2015 is an unfunded scheme, meaning there's no invested pool of assets sitting behind individual pension promises — benefits are paid directly from public funds as they fall due, backed by the government's guarantee, similarly to the NHS, Teachers', Civil Service and police pension schemes. Serving personnel do not pay employee contributions into AFPS 2015 in the way most other public sector employees do into their own schemes; instead, the cost of providing the pension and the wider benefits package is met by the Ministry of Defence as part of the overall cost of employing service personnel, reflecting the scheme's historic design as a non-contributory benefit that forms part of overall military remuneration.
Death-in-service and injury benefits — reflecting the risks of military service
Given the genuine risks associated with military service, AFPS 2015 (alongside the separate Armed Forces Compensation Scheme, which sits outside the pension scheme itself) includes valuable death-in-service and injury-related benefits. If a service person dies in service, their family typically receives a substantial tax-free lump sum death benefit and an ongoing pension for a surviving spouse, civil partner, or eligible partner, along with pensions for dependent children.
Ill-health and injury retirement provisions within AFPS 2015 provide enhanced benefits for personnel medically discharged due to injury or illness, with the level of enhancement depending on the severity and whether the condition is deemed attributable to service. It's worth noting that compensation for injuries attributable to service is generally handled through the separate Armed Forces Compensation Scheme, which can run alongside AFPS 2015 benefits rather than instead of them, so an injured service person may be entitled to support from both schemes depending on their individual circumstances.
Transferring AFPS benefits if you leave before qualifying for a pension
Not everyone who serves in the armed forces stays long enough to reach the point of qualifying for a preserved AFPS 2015 pension or an Early Departure Payment — the minimum vesting period for a preserved pension under AFPS 2015 is two years' qualifying service. Personnel who leave before this point may instead receive a return of any pension contributions where applicable, or have the option to transfer any preserved rights into another registered pension scheme. Anyone leaving service with a preserved AFPS pension, whether after two years or twenty, should keep their contact details updated with Veterans UK (who administer AFPS on behalf of the Ministry of Defence) to ensure their pension can be traced and paid correctly once they reach the applicable age.
The McCloud remedy and armed forces pensions
Many longer-serving members of the armed forces built up a mix of AFPS 1975 or AFPS 2005 (legacy) benefits and AFPS 2015 benefits over their career, having transitioned between schemes during the 2015 reforms. Following the McCloud legal ruling that the transitional protection given to older members at the time amounted to unlawful age discrimination, affected personnel who served during the remedy period (April 2015 to March 2022) are given a "deferred choice" between having that period of service calculated under their legacy scheme's rules or under AFPS 2015's rules — with the actual decision typically made later, often around the point of leaving service or retirement, once real comparative figures are available. Given how differently legacy schemes and AFPS 2015 treat retirement ages, accrual structure, and the Early Departure Payment mechanism, this choice can represent a genuinely significant sum for longer-serving personnel, and it's covered in more detail in our dedicated McCloud remedy guide.
Key AFPS 2015 features at a glance
What this means for serving personnel
For someone early in a military career, AFPS 2015 membership mostly means watching a career average pension build up year by year in the background, alongside the reassurance of strong death-in-service and injury protection given the nature of the job. For someone approaching 20 years' service, the Early Departure Payment becomes a much more immediate and practical consideration, since it can materially affect the income available in the years immediately after leaving service, well before the main AFPS pension comes into payment. For longer-serving personnel who lived through the 2015 transition, the McCloud deferred choice adds another layer of decision-making, generally made with the support of scheme communications and comparison tools provided at the relevant point in the process.
Armed forces pension rules, and particularly the Early Departure Payment and McCloud remedy calculations, are genuinely complex. This guide is a general explainer rather than a substitute for checking your own Veterans UK records. For free, impartial guidance, visit MoneyHelper.
Reservists and Reserve Forces pension arrangements
Members of the Volunteer Reserve Forces who undertake sufficient qualifying service are also eligible to build up pension benefits, typically through the Reserve Forces version of the armed forces pension arrangements, which mirrors the regular AFPS 2015 structure but is scaled to reflect the part-time and variable nature of reserve service. Reservists who are mobilised for a period of full-time service may build up pension on a different basis during that period, broadly reflecting their status as a full-time serving member for the duration of the mobilisation.
Because reserve pension arrangements depend heavily on the pattern and length of an individual's qualifying service, which can vary considerably from one reservist to another, anyone serving in the reserves who wants to understand their own pension position is generally best advised to check directly with their unit's administrative staff or Veterans UK, rather than relying on the regular-service rules described in this guide, which are written with full-time serving personnel primarily in mind.
How pay and rank affect AFPS pension growth
Because AFPS 2015 is a career average scheme, your pension builds up in direct proportion to your actual pensionable pay each year, which means promotions through the ranks translate fairly directly into faster pension growth for the years served at the higher rank, without retrospectively changing what was built up at a lower rank in earlier years. This is a meaningful difference from the legacy AFPS 1975 and AFPS 2005 schemes, where a late-career promotion could, in some circumstances, have a larger effect on the overall pension value by increasing the final salary figure used in the calculation.
Additional pay elements such as certain allowances tied to specific roles, operational deployments, or specialisations may or may not count as pensionable pay depending on the specific nature of the allowance, so personnel who receive a significant proportion of their overall pay through non-basic elements should check with their unit's pay and pensions staff to understand exactly which parts of their income are actually contributing to their AFPS 2015 pension growth.
Where to get help and check your own figures
Because individual AFPS 2015 figures depend on specific service history, rank progression, and (for longer-serving personnel) the McCloud remedy position, the most reliable source of information for any individual is always Veterans UK, who administer the scheme on behalf of the Ministry of Defence, or the online portals and modeller tools they provide. These resources allow serving and former personnel to view their accrued pension, estimate their Early Departure Payment position if applicable, and, where relevant, understand their own McCloud remedy comparison ahead of the point they need to make a decision.
How AFPS 2015 compares with civilian public sector pensions
While AFPS 2015 shares the same broad career average design as schemes like the NHS Pension Scheme, Teachers' Pension Scheme, and Police Pension Scheme 2015, the Early Departure Payment sets it apart as a genuinely distinctive feature with no direct civilian equivalent. Most civilian public sector schemes assume a workforce that broadly stays employed until close to Normal Pension Age, whereas the armed forces' career structure actively expects a substantial proportion of personnel to leave service in their 30s or 40s, whether at the end of a fixed engagement or after completing a full career — a structural difference that the Early Departure Payment exists specifically to address.
This is worth understanding if you're comparing your own pension position with a friend or family member in a different public sector role: a like-for-like comparison of AFPS 2015 against, say, the NHS Pension Scheme, needs to account for the EDP's income-bridging role, since a straightforward comparison of annual pension amounts at Normal Pension Age alone would understate the practical value of AFPS 2015 for personnel who leave service well before that age.
Planning around leaving service
Because so much of AFPS 2015's value depends on exactly when and how you leave service — whether you qualify for an Early Departure Payment, whether you have preserved benefits from a shorter engagement, or whether you're navigating the McCloud remedy after a long career — it's worth engaging with your own figures well before your actual leaving date rather than waiting until service ends. Veterans UK and service-specific resettlement support both provide guidance on pension options ahead of leaving, and using these resources early gives more time to understand how your specific service history translates into the benefits described in this guide.
For personnel approaching the 20-year point where an Early Departure Payment first becomes available, this is a particularly useful moment to check your figures directly, since the EDP can meaningfully shape decisions about when to leave service and what to expect financially in the years immediately afterwards, well before the main AFPS pension becomes payable at Normal Pension Age.
A note on terminology
You may see AFPS 2015 referred to slightly differently depending on the source — sometimes as the "Armed Forces Pension Scheme 2015," sometimes shortened to just "AFPS," and sometimes distinguished from its predecessors by year, as in "AFPS 15" versus "AFPS 05" or "AFPS 75." These all refer to the same scheme structure described in this guide; the naming conventions simply vary between official documentation, service-specific communications, and everyday conversation among serving personnel and veterans.