Armed Forces Pension Annual Allowance Calculator

How your AFPS pension input amount is worked out

For a defined benefit scheme like the AFPS, the annual allowance does not count money paid in. It counts how much the promised pension grew over the tax year, which HMRC calls the pension input amount. The method is set out in HMRC's Pensions Tax Manual at PTM053301:

• Opening value. Take the yearly pension built up at the start of the tax year, multiply it by 16, add any separate lump sum, then increase the total by CPI for the year to the previous September.
• Closing value. Take the yearly pension at the end of the tax year, multiply it by 16 and add any separate lump sum. No CPI uplift.
• Pension input amount. The closing value minus the opening value. If the answer is negative, it counts as nil.

On AFPS 75 and AFPS 05 the automatic lump sum of three times the pension is a separate lump sum, so each £1 of yearly pension is valued at £19. AFPS 15 has no automatic lump sum, so each £1 is valued at £16. The CPI uplift for each year the calculator covers:

Since the 2023/24 tax year there is one exception to the rule that a fall counts as nil. If your legacy AFPS 75 or 05 value falls in a year, that fall reduces your AFPS 15 growth, though not below zero. It does not work the other way round.

The MOD's 2025/26 annual allowance booklet shows the method in action. In its first example an AFPS 75 pension rises from £75,346.58 to £80,620.84 in 2025/26. The opening value is (£75,346.58 times 16, plus the £226,039.74 lump sum) raised by 1.7%, which is £1,455,921.97. The closing value is £1,531,795.96. The difference, about £75,874, is that year's AFPS 75 pension input amount, before any AFPS 15 growth is added.

The allowance: £60,000, the taper and carry forward

The standard annual allowance is £60,000 for 2026/27 and was the same for 2023/24, 2024/25 and 2025/26. It was £40,000 before that. It covers growth in every registered pension you have, not just the AFPS.

Taper. A high earner's allowance is reduced only if both tests are failed: threshold income over £200,000 and adjusted income over £260,000. It then falls by £1 for every £2 of adjusted income over £260,000, down to a floor of £10,000, which is reached at £360,000.

Carry forward. Unused allowance from the three previous tax years can be added, using the earliest year first, provided you were a member of a registered pension scheme in each of those years. For 2026/27 the carry forward years are 2023/24, 2024/25 and 2025/26, each with a £60,000 allowance. Enter what you did not use in the calculator.

The money purchase annual allowance of £10,000 applies only after you have flexibly accessed a defined contribution pot. The AFPS is defined benefit, so it does not limit AFPS growth.

How the charge is worked out

Growth over the allowance, after carry forward, is added on top of your taxable income and taxed at your own rates, from the top band down. There is no fixed rate: the same excess costs a basic rate taxpayer less than a higher or additional rate taxpayer. The calculator uses the 2026/27 bands, UK or Scottish, and treats the excess as the top slice of your income.

For Scottish taxpayers the starter rate does not apply to the charge, so the calculator uses 20% at the bottom. Some official documents, including the MOD's 2025/26 booklet, still list older Scottish charge rates; the calculator uses the current 2026/27 Scottish bands.

Two people are exempt from the charge altogether: someone who retired and took all their pension because of serious ill health, and someone who died in the year.

Pension Savings Statements: when AFPS sends one

If your AFPS pension growth in a tax year is more than £60,000, the scheme must send you a Pension Savings Statement, normally by 6 October after the tax year ends. For 2025/26 that was 6 October 2026, and for 2026/27 it will be 6 October 2027. The MOD also sends one if your pay suggests the taper might apply.

You can ask for one even if you are under £60,000. Ask before 6 July after the tax year ends and it arrives by 6 October; otherwise within three months of asking. Requests go to the JPAC Enquiry Centre.

Receiving one does not automatically mean you owe tax, since carry forward may cover the excess. It is also the only document to use for your tax return: the MOD says not to use a Benefit Information Statement, a Form 12 forecast or a Remediable Service Statement for this.

Scheme Pays: how AFPS spreads the charge

You can pay a charge yourself through Self Assessment, or ask the AFPS to pay it and take it out of your pension later. The scheme must agree, which is called mandatory Scheme Pays, when your charge for the year is over £2,000 and your AFPS pension input amount alone is over the standard £60,000 allowance, ignoring any taper. Below those lines the scheme can still pay on a voluntary basis.

The deadline is 31 July in the year after the tax year ends: 31 July 2027 for a 2025/26 charge and 31 July 2028 for 2026/27. You still report the charge on your Self Assessment return.

On the AFPS, you can ask for a quote first on Form AFP15136L, then make the election on AFPS Form 17 by 31 July. The election is irrevocable. The charge becomes a permanent reduction to your pension when it is paid, first estimated as if the pension started at 65 and adjusted at retirement; Early Departure Payments and dependants' benefits are not affected. The MOD says the AFPS will pay up to 45% of your AFPS pension input amount for the year.

Why annual allowance letters hit promotions and senior ranks

The MOD names the groups most likely to go over: officers at OF4 and above, particularly if promoted in the last two or three years, OF5 and above, medical and dental officers on special pay scales, and others with higher pensionable pay such as aircrew. Most other ranks are unlikely to be affected.

The reason is the final salary link. A legacy AFPS 05 pension is worked out on final pensionable pay, and the accrued rights of members who moved to AFPS 15 in 2022 stay linked to it. Take an illustration with 17 years of AFPS 05 service: if final pensionable pay rises from £70,000 to £80,000 in 2026/27, the pension rises from £17,000 to about £19,429, and the AFPS 05 pension input amount is about £33,869. A year of AFPS 15 at £80,000 adds £1,702 of pension, worth another £27,234, taking the total over £60,000 in a single year before any revaluation of the existing AFPS 15 pension is counted.

AFPS 75 behaves the same way through rank. The MOD's booklet says a member needs to hold a substantive rank for two years to qualify for its pension; after one year, 50% of the higher rank's pension has built up, rising to 100% by the end of the second year. AFPS 15 pensions are also revalued in line with earnings each year while you serve, while the opening value is uplifted only by CPI, so a year when earnings growth beats CPI adds to the growth even without a pay rise.

If you have left: deferred members

HMRC treats a deferred member as having no pension input amount for a year if their pension rises by no more than the permitted increase, which for most schemes means CPI. So a veteran whose preserved AFPS pension only receives the yearly Pensions Increase normally has nothing to count.

The carve-out does not help serving members with legacy rights. HMRC says that if pension rights are "still based on their current salary and so they increase if they receive a pay rise", the person is not a deferred member for this purpose. That describes AFPS 75 and AFPS 05 accrued rights of people still serving.

Service between 1 April 2015 and 31 March 2022 is covered by the McCloud remedy, which changed the annual allowance figures for those years. The MOD handles those cases separately, and our guide to armed forces pensions and the annual allowance covers the remedy recalculation.

How this differs from HMRC's calculator

HMRC's own pension annual allowance calculator covers every year from 2010/11 to 2026/27, but it needs your pension savings for each year typed in, and it gives the amount on which tax is due rather than the tax itself. It cannot work out a defined benefit pension input amount for you.

This calculator does the step HMRC's leaves out. It builds the pension input amount from your AFPS pension figures, with the legacy lump sum, the CPI uplift and the 2023 offset rule, then applies the taper, carry forward and your marginal rates. Use it to understand a statement or plan around a promotion, and use the Pension Savings Statement from Veterans UK for your tax return.