What an Early Departure Payment actually is
An Early Departure Payment, almost always shortened to EDP, is a bridging benefit. It is money paid to someone who leaves Regular Service before their scheme pension age but who has already served long enough to have earned a worthwhile pension. The idea is simple and humane: you have given the best years of your working life to the forces, you are too young to draw your full pension, but the country does not want to leave you with nothing in the gap. So the scheme pays you a tax-free lump sum on the day you leave, plus a monthly income that runs until your preserved pension comes into payment.
The part that trips people up is that EDP is not your pension. It sits alongside it. Your actual pension is preserved, frozen in the scheme and revalued each year, and it only starts paying when you reach scheme pension age. The EDP income is a separate, additional sum that bridges the years in between, and crucially it stops the day your full pension switches on. Think of it as a tide-you-over payment for the resettlement years, not an early version of the pension itself.
In pay-office terms I always described it as two taps. One tap is the EDP, which runs from the day you walk out the gate until your pension age. The other tap is your preserved pension, which is turned off until that pension age and then runs for life. For a while the EDP tap covers you, then it shuts off exactly as the pension tap opens. Get that picture clear and most of the confusion around EDP disappears.
Who qualifies, and the age and service tests
EDP only exists in two of the three schemes, and the eligibility tests differ. On AFPS 05 you broadly need to be at least 40 years old and to have completed at least 18 years of qualifying service when you leave. On AFPS 15 the bar is higher: you broadly need to be at least 40 and to have served at least 20 years, a combination the scheme calls the 20/40 point. In both cases you must be leaving before your scheme pension age, which is 65 on AFPS 05 and State Pension age on AFPS 15.
Both tests are gates you have to clear in full. Twenty years' service at age 39 does not earn an EDP 15, and neither does age 41 with only 19 years in. You have to satisfy the age test and the service test together on the day you leave. This is why timing your exit matters so much: a few extra months can be the difference between walking away with an EDP and walking away as a deferred member with nothing payable until pension age.
It is also worth being clear about what does not qualify. Time on a career break, certain non-Regular service, and breaks in service can all affect how your qualifying service is counted, so the figure on your discharge documents is the one that counts, not your rough mental tally. If you are anywhere near the boundary, get the qualifying-service figure confirmed in writing before you sign off, because the gap between just qualifying and just missing out is large.
Why AFPS 75 has no EDP
If you are on the 1975 scheme, EDP is not part of your world, and that catches a lot of people out. AFPS 75 has no Early Departure Payment at all. Its early-payment route is something different and, frankly, more generous in its own way: the Immediate Pension. Reach the Immediate Pension point, broadly 16 years from age 21 for officers or 22 years from age 18 for other ranks, and your pension starts paying straight away on discharge, for life, rather than being preserved.
So when an old soldier talks about getting their pension early after a 22-year career, they are usually describing the AFPS 75 Immediate Pension, not an EDP. The two are easy to muddle because both put money in your hand before the normal pension age, but they are mechanically different. An Immediate Pension is your actual pension switched on early and paid for life. An EDP is a separate bridging benefit that stops when the real pension starts.
This distinction matters under the McCloud remedy too. For the remedy period from 1 April 2015 to 31 March 2022, members affected by McCloud choose between their legacy scheme and AFPS 15. If your legacy scheme is AFPS 75, your early-leaver options look completely different depending on which way you choose for that period, because one route can offer an Immediate Pension and the other an EDP. That is exactly the kind of thing worth modelling carefully on your Remediable Service Statement.
How the lump sum and monthly income are worked out
On AFPS 05 the headline figures are a tax-free lump sum of three times your preserved pension, plus a monthly income worth around 50% of that preserved pension. The income is broadly flat until age 55 and then uprated by CPI from 55 onwards. The 50% figure is the scheme's headline rate and is what our calculator uses as an estimate; the exact amount in your own case can vary with your precise service profile.
On AFPS 15 the maths is more granular and rewards longer service directly. The EDP lump sum is 2.25 times your deferred pension. The monthly income starts from a base of 34% of the deferred pension at the 20/40 point and then adds 0.85% of the deferred pension for every whole year you served beyond 20. So a longer server gets a noticeably bigger EDP income. As with AFPS 05, the income is broadly flat until 55 and then catches up and is uprated by CPI from 55.
Two things to hold on to here. First, both EDP incomes are built from your preserved or deferred pension, so anything that grows that underlying pension also grows your EDP. Second, AFPS 15 has an extra option called inverse commutation, where you can give up some or all of your EDP lump sum to lift your monthly EDP income instead. That can suit someone who values steady monthly money over a one-off cash sum, but it is a permanent trade, so it deserves proper thought rather than a snap decision.
A worked example you can follow
Here is an illustrative example using AFPS 15 and round numbers, so you can see the mechanics. It is not a quote for any real person. Imagine someone leaves at age 45 having served 25 years, and their deferred AFPS 15 pension works out at £25,000 a year. They have cleared the 20/40 point, so EDP 15 applies.
First the income. They served 25 years, which is 5 years beyond the 20-year threshold. The income fraction is 0.34 plus 0.0085 for each of those 5 extra years, which is 0.34 plus 0.0425, giving 0.3825. Multiply the £25,000 deferred pension by 0.3825 and you get an EDP income of about £9,563 a year, which is roughly £797 a month. That income runs from age 45 until their AFPS 15 pension age, then stops.
Now the lump sum. The EDP 15 lump sum is 2.25 times the deferred pension, so £25,000 times 2.25 is £56,250, paid tax-free when they leave. So on the day they walk out they receive a £56,250 tax-free lump sum and start drawing about £797 a month, all while their £25,000 pension stays preserved and untouched until pension age. Remember this is illustrative and uses the headline scheme rates only; your own figures depend on your actual deferred pension, age and service.
How EDP is taxed
The tax split surprises people, so it is worth spelling out. The EDP lump sum is paid tax-free. Whether you are on AFPS 05 or AFPS 15, that one-off cash sum lands in your account without income tax taken off, which is part of what makes leaving with an EDP feel like such a boost.
The monthly EDP income is a different story. It is taxable, and it is treated as income in the year you receive it. That matters enormously because most people leaving with an EDP walk straight into a second career. Your EDP income stacks on top of your new civilian salary, and the combined total is what HMRC looks at. It is very easy to find yourself pushed into a higher tax band than you expected, or to get caught out by a tax code that has not yet been told about your EDP.
None of that makes an EDP a bad deal, but it does mean the headline monthly figure is not what reaches your pocket. When you are planning around an EDP, always work in after-tax terms once you know your likely civilian pay. This site gives estimates and is not regulated financial advice, so if the numbers are large or your situation is complicated, a suitably qualified tax or financial adviser is money well spent before you commit to a leaving date.
Common misunderstandings to avoid
The biggest mistake is thinking the EDP income is your pension drawn early and that it will reduce your pension later. It will not. Your preserved or deferred pension is untouched by the EDP and pays out in full from pension age, regardless of how much EDP income you drew in the meantime. They are two separate streams.
The second mistake is assuming the EDP income runs for life. It does not. It is a bridge, and it stops the moment your full pension comes into payment at your scheme pension age. Plenty of people budget as though the EDP monthly amount continues forever and then get a nasty shock when it ends. Plan for the handover from EDP to full pension, and check whether the two amounts are similar or very different, because the change in monthly income can be significant.
The third mistake is treating the calculator output, or even the headline scheme rates, as a guaranteed quote. Our estimates use the published headline figures, but your real EDP depends on your exact service, your scheme, and on AFPS 15 the precise number of years over 20. The only binding figure comes from an official forecast: Veterans UK form 12 if you are still serving, or form 14 if you have a preserved pension. Use the estimate to plan and the official forecast to decide.
How to check your own position and next steps
Start by pinning down which scheme you are in for the service in question, because that determines everything. If you joined after April 2012 you are almost certainly on AFPS 15 throughout. If you served before then, you may have legacy service on AFPS 75 or AFPS 05 plus AFPS 15 from April 2015, and the McCloud remedy choice over the 2015 to 2022 period can change which EDP or early-payment route applies. Your Remediable Service Statement is the document that lays this out.
Next, check your age and qualifying service against the right test: 40 and 18 years on AFPS 05, or 40 and 20 years on AFPS 15. If you are close to a threshold, get the figures confirmed in writing rather than relying on an estimate, because just missing out is an expensive accident. Then run your numbers through a calculator to get a feel for the shape of the lump sum and monthly income, and to see how an extra year of service might change the AFPS 15 income fraction.
Finally, get the official position before you act. Request a forecast from Veterans UK, form 12 while serving or form 14 once your pension is preserved, so you have binding figures rather than estimates. Bear in mind this is an independent education site, not affiliated with the MOD, Veterans UK or JPAC, and it provides estimates rather than regulated financial advice. Use it to understand how EDP works and to plan your questions, then take the official forecast, and where the stakes are high a qualified adviser, into your leaving decision.