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AFPS 75 Pension Formula:
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The AFPS 75 (Armed Forces Pension Scheme 1975) is a final salary pension scheme for UK armed forces personnel. It provides a pension based on final pensionable salary and years of service, offering secure retirement benefits for service members.
The calculator uses the AFPS 75 pension formula:
Where:
Explanation: The formula calculates the annual pension by multiplying the final salary by years of service, then dividing by 70. This provides a proportionate pension based on service length.
Details: Accurate pension calculation is essential for retirement planning, financial security, and understanding the benefits earned through military service. It helps service members prepare for post-service life.
Tips: Enter final pensionable salary in GBP and years of service in years. Maximum service years is typically 34 for full pension, but the calculator accepts up to 70 years for calculation purposes.
Q1: What is the maximum pension under AFPS 75?
A: The maximum pension is typically achieved after 34 years of service, which provides 34/70ths (approximately 48.57%) of final pensionable salary.
Q2: Can I receive a lump sum with my pension?
A: Yes, under AFPS 75, you can usually commute part of your pension for a tax-free lump sum, subject to certain rules and limits.
Q3: What counts as pensionable service?
A: Pensionable service includes all periods of regular service in the armed forces, plus any purchased additional service or transferred pension rights.
Q4: How does early retirement affect the pension?
A: Early retirement may result in an actuarial reduction unless you have sufficient service for immediate pension (usually 16+ years) or are retiring on medical grounds.
Q5: Is the pension index-linked?
A: Yes, AFPS 75 pensions are increased annually in line with the Consumer Price Index (CPI) to maintain purchasing power.