Serving in the Armed Forces comes with many risks, including death. But do you know what pensions your loved ones are entitled to if you do pass away?
It’s important that serving and ex-service personnel are aware of their dependents’ rights regarding pensions. This can be a difficult conversation but it’s vital that any dependents know what they’re entitled to.
All members of the armed forces automatically get enrolled onto the Armed Forces Pension Scheme (AFPS). The AFPS is paid into across a serving personnel’s career without any contribution. Their pension and when it will be paid out is calculated by the Armed Forces. But this depends on the individual pension scheme – depending when the service personnel enlisted, they’ll be enrolled onto different schemes. If they enlisted:
- Before April 2005, they’ll be enrolled on AFPS75
- Between April 2005 and March 2015, they would automatically be enrolled on AFPS05.
- If they were serving before April 2005, they could choose whether to move onto AFPS05 or remain on AFPS75.
- After March 2015, they’ll be enrolled on AFPS15.
- If they were serving before March 2015, they’d automatically be transferred to AFPS15.
There’s also the Gurkha Pension Scheme, and the Gibraltar Pension Scheme, which are separate to the AFPS. But these aren’t covered here.
The AFPS05 and AFPS15 Schemes
All service personnel will now be on the AFPS15 Scheme. But those that served between April 2005 and March 2015 will also have accrued pension rights under the AFPS05 Scheme – though the period may be extended past 2015, because of the 2015 pension implementation remedy.
If you’ve served in the Armed Forces for two or more qualifying years at the time of your death, your spouse or civil partner and any children will be eligible to receive part of your pension. The payment will depend on whether you’ve started to draw your pension.
If you die in service or before drawing your pension, your spouse or civil partner will be entitled to a lump sum payment, which will be:
- Four times your final pensionable earnings, if you die in service
- Your deferred lump sum if you die after leaving service.
Your spouse or civil partner will also receive a life-time pension equal to 62.5% of the value of your pension pot at the time of your death.
If you’ve already started to draw your pension, your spouse or civil partner will receive 62.5% of your pension, alongside a lump sum equal to five years of your pension. This lump sum will only be paid if you die within five years of drawing your pension.
The situation with children is slightly more complex. The amount received will depend on whether there's a surviving spouse or civil partner and the number of child dependents. Children will receive a pension if they’re:
- Under 18
- Under 23, in full-time education or vocational training
- Unable to obtain gainful employment because of physical or mental impairment.
What if you have no dependents?
If you don‘t have any dependents, then you can nominate a recipient to receive payments. Alternatively, your estate will receive the payments under AFPS05 and AFPS15.
A nominee or your estate will receive:
- In Service
- A tax-free lump sum equal to four times your pensionable earnings.
- In Deferment
- A tax-free lump sum equal to three times your annual deferred pension.
- In Retirement
- A tax-free lump sum equal to five years’ worth of pension (minus any lump sum that you had previously received).
The pension entitlement and lump sums aren’t automatically paid, they must be claimed by your spouse or civil partner informing DBS Veterans UK – they have to notify them of your death to make sure that the correct payments are made.
The AFPS75 Scheme
If you served before 2005, you’ll have automatically been enrolled onto the AFPS75 Scheme. In this scheme, the rules around the pension entitlement more complex. If you pass way, your spouse or civil partner will be entitled to a lump sum and a taxable life-time pension as follows:
- In Service
- A lump sum payment equal to three times your representative pay
- A short-term pension equal to your basic pay for 91 days, or 182 days if there are eligible children
- A long-term pension of either 50% of the pension that would’ve have been received if you were medically discharged, or 50% of an immediate pension (whichever is worth more)
- If you moved to the APFS15 scheme from April 2015, no short-term pension is payable. But the lump sum is increased to four times the final pensionable savings.
- In Deferment
- A long-term pension based on 50% of your pension for service after 31 March 1973, and 33% for any service before
- A lump sum equal to three times your annual pension that would’ve become payable.
- In Retirement
- A short-term pension paid for 91 days, or 182 if there are eligible children, before a long-term pension and/or 33%of the pension for service before 31 March 1973
- A lump sum payment equal to three times your representative pay (less any previously paid lump sum).
As with the 2005 and 2015 schemes, the situation with children is slightly more complex – eligibility depends on various factors. But most children will receive something if they’re:
- Under 18
- Under 23 in full-time education or unpaid vocational training
- Unable to obtain gainful employment because of physical or mental impairment.
What if you have no dependents?
Under AFPS75 if you have no dependents or eligible children, the lump sum will be paid to your estate. You can’t nominate an individual to receive this lump sum payment.
What if your death is caused by service?
If your death is attributable to service, your dependents may be entitled to other available benefits. The benefits differ depending on whether the death was before or after 6 April 2005.
If death is attributable to service before 6 April 2005, the benefits may be paid under either:
- The War Pension Scheme (WPS)
- The Armed Forces Attributable Benefits (AFAB) Scheme.
If death is attributable to service after 6 April 2005, benefits may be paid under the Armed Forces Compensation Scheme (AFCS).
Further reading:
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