What the accrual rate actually means
The accrual rate is the engine room of any Armed Forces pension. Put plainly, it is the fraction of your pensionable pay that you earn as annual pension for each year you serve. If a scheme has an accrual rate of 1/70th, then every full year of service builds you a slice of pension worth one seventieth of the relevant pay. Stack up the years and you stack up the slices, and the total of those slices is the yearly pension you will draw in retirement.
I spent years explaining this to soldiers at the desk, and the penny usually drops when you stop thinking about percentages and start thinking about fractions of pay. A lower number on the bottom of the fraction is better for you. A scheme that gives 1/47th builds a bigger slice each year than one that gives 1/70th, because a forty-seventh of your pay is a larger amount than a seventieth of the same pay. The accrual rate is the single most important figure in working out what your service is worth, so it pays to understand exactly how yours works.
One word of caution before we go further. The accrual rate decides how the pension is built, but it does not decide everything about what lands in your bank account. The pay it is applied to, the years that count, any scheme maximum, the lump sum rules and your pension age all sit alongside it. Treat the accrual rate as the foundation, then read it together with those other terms rather than on its own.
How accrual works across AFPS 75, 05 and 15
The three main schemes do not share an accrual rate, and that is the first thing to get straight. AFPS 75 is a final-salary scheme based on representative pay for your rank, and it builds up to a maximum of 48.5% of that pay over a full career, which is 34 years for officers and 37 years for other ranks. Rather than quoting a tidy fraction, it is easiest to picture the 48.5% being earned steadily across those years, so each year adds a little under one and a half per cent of pay to the eventual pension. Reach the full career length and you have the maximum.
AFPS 05 is also a final-salary scheme, but here the accrual rate is a clean fraction: 1/70th of your final pensionable pay for every year of reckonable service. Serve ten years and you have built ten seventieths of final pay, and so on, up to a scheme maximum of around 57% of final pay, which is reached at 40 years. Because it is final salary, the pay used is your pay near the end of your service, so a late promotion lifts the value of every year you have served.
AFPS 15 works on a completely different principle. It is a Career Average Revalued Earnings, or CARE, scheme. Each scheme year, which runs from 1 April to 31 March, the scheme banks 1/47th of that year's actual pensionable earnings into a running pot, and then revalues the pot each year to keep its value broadly in line. There is no final-salary link and no scheme maximum on the years you can build. Add the revalued slices together at the end and that total is your annual pension. From 1 April 2022 every serving member builds AFPS 15, so for most people reading this it is the scheme their current service is paying into.
Why the same accrual rate behaves differently in CARE
It is tempting to line the fractions up and declare 1/47th the clear winner over 1/70th. That comparison is real, but it is not the whole story, because the accrual rate is multiplied by different pay in a CARE scheme than in a final-salary scheme. In AFPS 05, every year's 1/70th is applied to your final pay, so years you served as a junior rank get dragged up to the value of your final salary. In AFPS 15, each year's 1/47th is applied to what you actually earned that year, then revalued, so an early low-paid year stays a low-paid year, just protected against inflation.
This is why AFPS 15 uses a more generous fraction. The richer 1/47th accrual is the trade-off for losing the final-salary uplift. For someone who is promoted hard and late, the final-salary link in AFPS 05 can be worth a great deal. For someone with steady earnings, or a long career at a stable rank, the faster CARE accrual can come out very well. Neither is universally better, and anyone affected by the McCloud remedy choice needs to model both rather than assume.
There is one practical point worth holding on to about AFPS 15. Because the in-service revaluation broadly tracks earnings, each past year's slice is kept roughly in step with current pay levels while you serve. That is why the calculator on this site can ask for your current pensionable pay rather than demanding a year-by-year earnings history, and still give a sound estimate. It is an estimate, not an official figure, but the accrual logic behind it is the genuine 1/47th.
A worked example you can follow
Here is an illustrative example, using round figures only so the arithmetic is clear. Imagine pensionable pay of £47,000 and twenty years of service, and let us run the same numbers through the AFPS 05 and AFPS 15 accrual rates to see the difference. These are made-up figures chosen to show the method, not a forecast for any real person, and your own pay and service will give different results.
On AFPS 05 at 1/70th: £47,000 multiplied by 20 years, divided by 70, gives an annual pension of £13,429 in round terms. Because AFPS 05 carries an automatic tax-free lump sum of three times the annual pension, that would come with a lump sum of about £40,286. The 1/70th is doing the heavy lifting, and the final-salary basis means the £47,000 is your pay near the end, applied to all twenty years.
On AFPS 15 at 1/47th, using the same £47,000 and 20 years as a simplified stand-in for the revalued pot: £47,000 multiplied by 20, divided by 47, gives an annual pension of £20,000 in round terms. That is noticeably larger, which is the faster accrual rate showing its hand. But remember AFPS 15 pays no automatic lump sum. If you wanted tax-free cash you would commute up to a quarter of the pension at a fixed rate of about £12 per £1 given up, which permanently reduces the income. So the headline pension is bigger, but the shape of the benefits is different, and the right comparison weighs income and lump sum together.
Why the accrual rate matters to your pension
Because the accrual rate compounds across every year you serve, small differences add up to large sums over a full career and a long retirement. A pension built at 1/47th rather than 1/70th, on the same pay and years, is meaningfully larger every single year you draw it, and that gap is then carried forward by index-linking for the rest of your life. Getting the accrual rate right in your own head is the difference between a rough guess and a realistic plan.
The accrual rate also frames every big decision you make. Whether to stay in for another assignment, whether a promotion is worth chasing for pension reasons, how an Early Departure Payment compares with serving to pension age, and which way to jump on a McCloud remedy choice all turn, in part, on how the accrual rate interacts with your pay and your years. None of these decisions can be made sensibly without knowing which fraction is building your pension and what pay it is applied to.
It matters for partners and families too. Survivor benefits and death-in-service lump sums are built on the same pension that the accrual rate produces, so a larger accrued pension generally means more protection for the people who depend on you. This is one reason it is worth checking your position rather than assuming, particularly if you have service split across more than one scheme.
How to check your own position
Start by working out which scheme, or schemes, your service sits in. If you joined from 1 April 2015 you have only ever been in AFPS 15. If you joined earlier you may have legacy service in AFPS 75 or AFPS 05, and from 1 April 2022 you will have been building AFPS 15 on top. Anyone who served during the remedy period of 1 April 2015 to 31 March 2022 will have a choice to make about which scheme that period counts towards, set out in a Remediable Service Statement.
Next, identify the pay the accrual rate is applied to. For the final-salary schemes that is representative pay for your rank, or your final pensionable pay, near the end of service. For AFPS 15 it is your actual pensionable earnings each year, revalued. Specialist pay and most allowances are usually excluded, so your pensionable pay is often a little lower than your gross pay, and it is worth not over-estimating it.
Then put realistic numbers through a calculator to see the shape of the result, and treat the output as an estimate to inform your thinking. When you want a figure you can rely on for a real decision, request an official forecast from Veterans UK using form 12 if you are still serving or form 14 if your pension is preserved. This site is independent and not affiliated with the MOD, Veterans UK or JPAC, and it provides estimates rather than regulated financial advice.
Common mistakes and misunderstandings
The most frequent error I saw was reading the fraction the wrong way round. People assume a bigger bottom number must be better because it sounds like more, when in fact 1/47th builds a larger annual slice than 1/70th. Always remember that a lower denominator is the more generous accrual rate, all else being equal.
The second common mistake is comparing accrual rates without comparing the pay they apply to. Holding up 1/47th against 1/70th and stopping there ignores the final-salary uplift that AFPS 05 gives and the lack of it in AFPS 15. The fractions are only half the picture, and a fair comparison has to bring in the pay basis, any scheme maximum and the lump sum treatment as well.
A third trap is forgetting the scheme maximums and the lump sum differences. AFPS 75 stops at 48.5% of pay over a full career and AFPS 05 at around 57% at 40 years, so extra years beyond those points do not keep adding pension at the same rate. And AFPS 15 pays no automatic lump sum, unlike the automatic three-times-pension lump sum in AFPS 75 and 05, so a like-for-like comparison needs to account for how you would create cash if you wanted it.
How accrual relates to other AFPS terms, and the tax treatment
The accrual rate never works in isolation, so it helps to see how it links to the other terms you will meet. Pensionable pay is what the accrual rate is multiplied by. Final salary and CARE describe the two ways that pay is fixed, near the end of service or as a revalued career average. The lump sum, the commutation factor and Early Departure Payments all build on the pension that the accrual rate produces, and index-linking then protects that pension against inflation once it is in payment.
On tax, the pension income your accrual rate builds is taxable as earned income when it comes into payment, in the same way as a salary, and pensions in payment are uprated each year, rising 3.8% from April 2026 in line with CPI. The automatic lump sums in AFPS 75 and 05, and any lump sum you create by commuting AFPS 15 pension, are normally paid free of tax. EDP lump sums are tax-free too, while the EDP monthly income that bridges you to pension age is taxable. The accrual rate decides the size of the pot; the tax rules decide how each part of it is treated.
If you take nothing else from this page, take this. Find out which accrual rate is building your pension, confirm the pay it is applied to, and remember that the fraction is the start of the calculation and not the end of it. Model your position with a calculator to get the shape, then get an official forecast from Veterans UK before you make a decision that depends on the number. That sequence will keep you out of trouble.