Armed forces compensation scheme
youâ€™ve served in the armed forces, then youâ€™re entitled to claim a pension upon retirement through the AFPS (Armed Forces Pension Scheme). The AFPS is a non-contributory pension scheme which you can usually claim when youâ€™re 55. Claim requirements are dependent on when youâ€™ve served:
I served before 6th April 1975
Prior to this date, there was actually nothing in place for the provision of preserved pension benefits. Officers had to have completed 16+ years of service from the age of 21, or 22 years+ from the age of 18 for all other ranks. If you didnâ€™t meet this criterion, you would have lost all pension entitlement.
In 1988 the rules were changed so that you only needed to have completed at least 2 years of service and the age requirement was dropped completely. If you served before the 6th April 1975, you can claim for a Service Preserved Pension once youâ€™re 60.
I served between 1975 and 2005
The AFPS 75 pension scheme is for personnel that served between the 6th April 1975 and the 6th April 2005. The type of pension and amount you get paid will depend on your final rank and your length of service:
ï‚· Full career pension â€“ 34+ years of service (officers), 37+ years for all other ranks. Youâ€™ll also be entitled to a lump-sum payment (normally tax-free) of 3 times your annual rate of pension.
ï‚· Immediate pension â€“ 16+ years of service (officers), 22+ years for all other ranks. Youâ€™ll also be entitled to a lump-sum payment (normally tax-free) of 3 times your annual rate of pension.
ï‚· Preserved pension â€“ 2+ years of service. Youâ€™ll also be entitled to a lump-sum payment (normally tax-free) of 3 times your preserved pension.
I served from 2005 onwards
The AFPS 05 pension scheme is for personnel that joined the armed forces from the 6th April 2005 onwards. As with the AFPS 75, the type of pension and amount you get paid will depend on your final rank and your length of service:
ï‚· Early Departure Payment scheme â€“ youâ€™re at least 40 years of age and have completed 18+ years of service. Aside from receiving a preserved pension, youâ€™ll also be entitled to a lump-sum payment (normally tax-free) of 3 times your preserved pension.
ï‚· Preserved pension â€“ youâ€™ve completed at least 2+ years of service. Youâ€™ll also be entitled to a lump-sum payment (normally tax-free) of 3 times your preserved pension.
Pensions are index-linked and are currently increased each year in line with the consumer price index.
I am a member of the Full Time Reserve Service
The RFPS pension scheme is for reservists that have joined the RAF Volunteer Reserve, the Royal Marines Reserve, the Royal Navy Reserve, or the Territorial Army from the 6th April 2005 onwards. A basic pension can be claimed and paid out if you serve until youâ€™re 60. If you leave before youâ€™re 60, you can claim when youâ€™re 65 years old.
Visit the MODâ€™s Pension and Annual Allowance Calculator to check your pension entitlements.
Changes To The Armed Forces Pension
Preserved Pensions Overview and History. Veterans who have served in the Armed Forces since 1975 and did not qualify for an immediate pension may be entitled to a Preserved Pension(PP).
Prior to 6 April 1975 there was no provision for a preservation of pension benefits and Service personnel who left the Armed Forces had to have completed 16 years service from age 21 (Officers) or 22 years from age 18 (Other Ranks) to be eligible for a pension. Those who left before that date, without completing the above criteria, had no pension entitlement unless they were medically retired.
Pension rules changed on 06 April 1975 for pensions to be preserved for payment at age 60 for all those discharged over the age of 26 with a minimum of 5 years service. In 1978 the age criterion was removed. On 06 April 1988 the qualifying period was reduced from 5 to 2 years. The Armed Forces Pension Scheme (AFPS) 75 PP whose service ended before 6 April 2006 should claim their pensions, from SPVA, at age 60.
AFPS 75 pensioners whose service ended after 6 April 2006 but who had at least 2 years service before 6 April 2006 should claim the proportion of their pension which relates to their pre 6 April 2006 service at age 60 with the remainder becoming payable at age 65.
Early Payment of Preserved Pensions. Preserved Pensions may be paid early, subject to consideration by SPVA, if a Veteran has become permanently unable to work full-time, in any capacity, through ill-health, and this condition will continue until preserved pension age. Early payment of the pension may be subject to review and stopped if it is considered that the criterion for payment was no longer met.
Early Payment of Preserved Pensions with Actuarial Reduction. PP may be claimed early with an actuarial adjustment to take account of the longer period for which the pension will be in payment. The ages from which this form of early payment may be claimed are:
– AFPS 75 – the proportion of the preserved pension payable at age 65 may be claimed from age 60
– AFPS 05 – from age 55. Such a claim will not affect any EDP payments which are being paid.
– Reserve Forces Pension Scheme (RFPS) – from age 55.
2009 changes to DWP rules on the age at which Pension Credit Members’ benefits may be paid have allowed us to make a rule change in all the above schemes to allow those whose benefits had not yet been paid to claim them from age 55 with actuarial reduction.
What do I do next?
SPVA will not contact you to commence payment of a Preserved Pension you must contact them. To find out if you are entitled to a preserved pension ring or write to the SPVA JPAC Enquiry Service on 0800 085 3600 or 94560 3600 or alternatively: E-mail: <mailto:JPAC@spva.mod.uk> JPAC@spva.mod.uk
Why was the preserved pension age increased from 60 to 65?
Prior to 6 April 2006 all personnel who were in AFPS 75 and left before the immediate pension point having completed at least two years reckonable service had their benefits paid at age 60. For service after 6 April 2006 the preserved pension age is 65. The reasons for the increase to the preserved pension age was to take account the impact of longevity on public sector schemes.