AFPS 75 vs AFPS 05 vs AFPS 15 Comparison 2026/27

The Armed Forces have operated three different pension schemes over the past 50 years, and Service personnel today may have benefits across all three depending on when they joined and their career path. This guide compares AFPS 75, AFPS 05, and AFPS 15 side by side for 2026/27, including the McCloud remedy choice between legacy schemes for the affected period.

When each scheme applied

Personnel who enlisted or were commissioned before 6 April 2005 joined AFPS 75, with an option to transfer to AFPS 05. Those who joined between 6 April 2005 and 31 March 2015 joined AFPS 05. Those joining since 1 April 2015 joined AFPS 15, and on 1 April 2022 all members of the Armed Forces moved into AFPS 15, so it is now the only scheme anyone accrues in. McCloud applies to legacy scheme members for the remedy period 1 April 2015 to 31 March 2022.

High-level comparison

Sources for the whole table: MOD, AFPS 75: Your Pension Scheme Explained, AFPS 05: Your Pension Scheme Explained and AFPS 15: Your Pension Scheme Explained.

AFPS 75 - the legacy final salary scheme

AFPS 75 was the first formal Armed Forces pension scheme, and the first thing to understand about it is that it is not a final-salary scheme in the ordinary sense. The booklet: "For the vast majority, AFPS 75 is calculated on your final rank and length of reckonable service ... Members of the Armed Forces with the same rank and same number of years of reckonable service are normally awarded the same pension, regardless of their actual pay either at retirement or discharge, or earlier in their career. This is known as the representative rate of pay for the rank."

It paid:

• A pension built on the representative rate for the final rank, to a maximum of 34 years' reckonable service for officers and 37 for Other Ranks. "A full pension can be worth 48.5% of representative pay."
• A tax-free lump sum of 3 times the annual pension.
• An Immediate Pension on leaving before age 55 with at least 16 years' service as an Officer or 22 years' service as an Other Rank.

Two things are widely misstated about the Immediate Pension. The officer point is 16 years, not 22. And it is not the full career pension drawn early: "An immediate pension is a proportion of the full career pension." It is fixed in cash until age 55, at which point it is uprated for the whole rise in the cost of living since Service ended and indexed to CPI thereafter.

Source: MOD, AFPS 75: Your Pension Scheme Explained.

AFPS 05 - the closed final salary scheme

AFPS 05 was the successor scheme for personnel joining between 2005 and 2015. Key features:

• Genuine final salary: 1/70 of "the greatest amount of pensionable earnings you received for 365 consecutive days over the last 3 years of reckonable service", multiplied by reckonable service, to a maximum of 40 years.
• Tax-free automatic lump sum of 3 times pension.
• Survivor pension of 62.5%, against a half-pension basis in AFPS 75.
• Death-in-service lump sum of 4 times final pensionable earnings.
• No Immediate Pension. AFPS 05 replaced the AFPS 75 immediate pension with an Early Departure Payment at the 18/40 point: "To be eligible for an EDP, you will have to reach age 40 or over (but before the age of 55) and serve as a Regular for at least 18 years."

The 18/40 point is the correction that matters most here. "18 years" on its own is not the test, and EDP is not an AFPS 15 invention: AFPS 05 had it first, on a more generous footing (a lump sum of 3 times the deferred pension and an income of at least 50% of it, rising to 75% from age 55, against 2.25 times and 34% in AFPS 15).

Source: MOD, AFPS 05: Your Pension Scheme Explained.

AFPS 15 - the current CARE scheme

AFPS 15 is the post-Hutton-Review reformed scheme:

• Type: Defined Benefit Career Average Revalued Earnings (CARE).
• Accrual rate: 1/47 of pensionable pay per year (highest accrual rate among public-sector schemes).
• Revaluation: the Average Weekly Earnings index while serving, not CPI.
• Normal Pension Age: 60. A deferred pension is instead paid from your State Pension Age.
• Early Departure Payment (EDP): lump sum of 2.25 times the deferred pension plus an income of 34% of it, at the 20/40 point - age 40 and 20 years of Regular service, both.

AFPS 15 is the most generous CARE scheme in UK public service, reflecting the unique Service requirements compensated through the high accrual rate. Employee contribution remains zero.

The McCloud remedy and the choice between schemes

For Service personnel with legacy AFPS 75 or AFPS 05 service who continued into the AFPS 15 period, the McCloud remedy applies to the period 1 April 2015 to 31 March 2022:

• Default position: service in this period is treated as AFPS 75 or AFPS 05 (whichever applied).
• At retirement, members can choose AFPS 15 (CARE) for this period if it would produce higher benefits.
• The Remediable Service Statement (RSS) issued by Veterans UK shows both options.

For most affected personnel, AFPS 15 (CARE) produces a higher benefit because:

• The 1/47 accrual is generous compared with AFPS 05's 1/70, and with an AFPS 75 full career pension capped at 48.5% of representative pay.
• AFPS 15 revalues in-service accrual on the Average Weekly Earnings index, which has run ahead of prices in several of the remedy years.

But personnel who had a substantial salary growth during the remedy period - especially those promoted to senior ranks - may find AFPS 75 or AFPS 05 final salary better. The RSS confirms the figures.

See McCloud Remedy Deep-Dive 2026 for full McCloud framework detail.

Tax-free lump sum comparison

Each scheme treats the tax-free lump sum differently:

For someone with £10,000 of annual pension entitlement:

• AFPS 75 / 05: £30,000 tax-free lump sum plus £10,000 a year pension.
• AFPS 15: £10,000 a year pension and no automatic lump sum. You can surrender pension for cash at 12:1, so every £1,000 of pension given up buys £12,000 of lump sum - but HMRC caps tax-free cash at 25% of the capitalised value of the benefits, which on a £10,000 pension limits the surrender to about £3,571. That produces roughly £42,857 of tax-free cash and leaves about £6,429 a year of pension.

The AFPS 75 / 05 lump sum is automatically tax-free up to the lump sum allowance that replaced the Lifetime Allowance from 6 April 2024: "Individuals are entitled to a lump sum allowance of £268,275 unless they have a protected right to a higher lump sum allowance" (HMRC Pensions Tax Manual PTM171000). AFPS 15 commutation is tax-free within the same allowance. Note that this guide does not abbreviate it to "LSA": across the Armed Forces guides LSA is Longer Separation Allowance.

To check whether those tax, NI and AFPS 15 lines look right on your own JPA slip, see How do I check my payslip is correct?.

Which scheme produces higher benefits

The answer depends on:

• Final salary versus average salary across the service period.
• Length of service.
• Rank progression.
• When the member retires.

A simplified rule of thumb:

• For personnel with strong rank progression in the last 2 to 5 years of service, AFPS 75 or AFPS 05 typically produce higher benefits (final salary captures the high years).
• For personnel with steady service and regular pay growth, AFPS 15 typically produces higher benefits (CARE accrual builds compounding pension across the career).
• For personnel with a major promotion or pay increase between 2018 and 2022, the legacy scheme is often better for the remedy period.

The RSS and a regulated FCA-authorised pension adviser can give the precise answer for individual circumstances.

Annual Allowance interaction

All three schemes test against the Annual Allowance (£60,000 in 2026/27). The Pension Input Amount is the closing value less the opening value, where:

• the opening value is the pension accrued at the start of the period multiplied by 16, plus any separate lump sum, and then increased by the 12-month rise in CPI to the September before the tax year starts;
• the closing value is the same calculation at the end of the period, with no CPI step.

Sections 234 to 236ZA of the Finance Act 2004, as set out in HMRC Pensions Tax Manual PTM053301. The CPI step on the opening side is the reason inflation on its own produces almost no Pension Input Amount: it lifts both sides together.

For a senior officer (Wing Commander or Captain RN) approaching retirement, the AA can be triggered by:

• Promotion in the final years (final salary scheme spike).
• High CPI revaluation in the AFPS 15 portion.
• Late-career commutation decisions.

Service personnel approaching AA breaches should consider:

• Scheme Pays - paying the AA charge from the eventual pension benefit.
• Carry forward of unused AA from the prior 3 tax years.

What does not help is an AVC. A money-purchase AVC contribution is itself a Pension Input Amount, so it adds to the total being tested against the Annual Allowance rather than reducing it. For someone already over the allowance, an AVC makes the charge larger.

Why the three cannot be set side by side as percentages

It is tempting to put "pension as a percentage of final salary" for all three schemes in one table. It cannot honestly be done, and an earlier version of this guide tried.

• AFPS 75 is a percentage of the representative rate for the rank, not of your actual pay, and it is capped: "A full pension can be worth 48.5% of representative pay", reached at 34 years for an officer and 37 for an Other Rank. Any table showing an AFPS 75 officer above that at 35 years is wrong on the scheme's own maximum.
• AFPS 05 is a percentage of final pensionable earnings, at 1/70 a year to a 40-year maximum, so 22 years is 31.4% of that figure and 35 years is 50%.
• AFPS 15 accrues 1/47 of each year's own pay, indexed on earnings. There is no single salary to take a percentage of, so "47% after 22 years" only means anything if pay never moved.

Those are three different denominators. The only comparison that answers the question for a real person is the one on the Remediable Service Statement, which values both sides on the same date.

Death-in-service benefits

The AFPS 05 and AFPS 15 survivor pension is significantly more valuable than AFPS 75. Note the base in both: it is 62.5% of an enhanced ill-health pension, which credits service the member never had the chance to complete, not 62.5% of the pension accrued at the date of death. For a member who dies early in a career, the two are a long way apart.

Action checklist for Service personnel

1. Identify which scheme applied during your service career (AFPS 75 / 05 / 15).
2. If you served before April 2015, confirm whether McCloud applies.
3. Save your Remediable Service Statement (RSS) when issued.
4. Use Veterans UK pension portal to check accrual figures.
5. Consider the Forces Pension Society for impartial advice: £47 for an annual subscription.
6. For substantial AA exposure or scheme choice decisions, consult an FCA-authorised pension adviser experienced with public-sector and Armed Forces schemes.

Disclaimer

PayslipIQ provides automated educational guidance based on the figures you supply. It is not regulated pension or financial advice. The Armed Forces pension schemes are technical and interact with HMRC tax rules, McCloud remedy provisions, and individual service history - for substantial decisions especially around retirement timing, McCloud choice, AA charges, or Lifetime Allowance legacy issues, consult a regulated FCA-authorised pension adviser experienced with Armed Forces personnel.