Immediate Pension (IP) under AFPS 75
The Immediate Pension, or IP, is the reason AFPS 75 still feels different from every scheme that came after it. Reach the right length of service and you draw a pension and a tax-free lump sum the day you take off the uniform, not years later. This guide explains when the IP kicks in for officers and for other ranks, how the pension and lump sum are built, and how it differs from a preserved pension and from an Early Departure Payment. If you are not certain which scheme your service even sits in, start with AFPS 75, 05 and 15 explained.
Key takeaways
- AFPS 75 pays an Immediate Pension, an annual pension plus a tax-free lump sum, drawn the day you leave rather than deferred to a later pension age.
- Officers reach the IP point after 16 years' service from age 21, typically around age 37; other ranks reach it after 22 years from age 18, typically around age 40.
- The lump sum is automatic, tax-free and fixed at 3 times your annual pension.
- Leave before the IP point and you get a preserved pension instead, held until age 60 under AFPS 75 (age 65 under AFPS 05).
- AFPS 75 has no Early Departure Payment; the Immediate Pension is its early-payment route.
- The pension is flat until age 55, then rises each year with CPI, and you can take resettlement commutation for extra cash up front.
What the Immediate Pension actually is
The Immediate Pension is exactly what the name says: a pension that starts immediately, the moment you leave Regular Service, provided you have served long enough to earn it. It comes in two parts, an annual pension paid for life and a one-off tax-free lump sum, and both land straight away rather than being parked until some distant pension age. That is what sets AFPS 75 apart from the schemes that replaced it.
Because the money starts on the first day of civilian life, the IP is genuinely an income, not just a promise for later. Plenty of people use it to bridge the gap while they retrain or settle into a second career, which is roughly what it was built to do back when service careers were expected to be shorter and a second job the norm.
AFPS 75 closed to new members on 6 April 2005, and everyone still serving moved their ongoing build-up to AFPS 15 on 1 April 2022. Even so, the Immediate Pension rules still govern the service you accrued under AFPS 75, so if you hold an older AFPS 75 slice, this is how that part pays out.
The 16-year point and the 22-year point
AFPS 75 sets two different service milestones, and which one applies to you depends on whether you serve as an officer or in the other ranks. Officers reach the Immediate Pension point after 16 years' reckonable service counted from age 21. Other ranks, ratings and marines reach it after 22 years counted from age 18. Miss the milestone, even by a short spell, and the IP is off the table, so the exact date matters.
Because the clock starts at a fixed age, those service lengths translate into fairly predictable ages. An officer who serves the full 16 years from 21 reaches the IP point at around age 37. An other rank serving 22 years from 18 reaches it at around age 40. Those are the classic 16-year point and 22-year point you will hear talked about in the mess.
| Officers | Other ranks | |
|---|---|---|
| Accrual starts at | age 21 | age 18 |
| Immediate Pension point | 16 years' service | 22 years' service |
| Typical age at the IP point | around 37 | around 40 |
| Maximum reckonable service | 34 years | 37 years |
The gap between the two routes is deliberate. Officers tend to join later and the scheme assumes a shorter commissioned career, so the qualifying period is shorter, while other ranks build over a longer stretch. Either way, it is length of service from your accrual start age that counts, not your age on the day you happen to leave.
How the pension and lump sum are worked out
Your AFPS 75 pension builds towards a maximum of 48.5% of your representative pay over a full career, which is 34 years for officers and 37 years for other ranks. It is worked out on the representative pay rate for your final rank rather than your actual salary, so two people who leave at the same rank with the same service usually walk away with much the same pension. The longer you serve up to that ceiling, the closer you get to the 48.5%.
On top of the annual pension sits the lump sum, and this is the part people tend to like. It is automatic, so you do not have to ask for it or give anything up to get it, and it is fixed at 3 times your annual pension, paid tax-free. An Immediate Pension of a given annual figure therefore comes with a tax-free lump sum three times that size.
One quirk to plan around: the annual pension is flat until age 55, meaning it does not rise with inflation in those early years. At 55 it catches up, with all the inflation since you left applied in one go, and from then on it rises with CPI each year. So the buying power dips a little through your late thirties and forties before it is restored. To see roughly where your own numbers land, try the AFPS 75 calculator.
Model your Immediate Pension
Enter your rank basis, service length and pay to estimate your AFPS 75 annual pension and the automatic three-times tax-free lump sum.
Immediate Pension versus a preserved pension
The Immediate Pension only pays out if you actually reach the 16-year or 22-year point. Fall short and you do not lose your pension, but it changes character completely: instead of an Immediate Pension you get a preserved pension, sometimes called a deferred pension. The difference that matters is timing.
A preserved AFPS 75 pension is held until pension age, which is 60 under AFPS 75, before it pays out. So an other rank who leaves at 20 years, two short of the 22-year point, draws nothing until 60, whereas a colleague who serves the full 22 years starts drawing the day they leave. That two-year difference in service can mean a twenty-year difference in when the money starts. Preserved AFPS 05 service, by contrast, waits until age 65.
This is why the IP points loom so large in resettlement planning. Timing your exit to clear the milestone rather than just miss it is often worth far more than a slightly higher final rank, because it moves your pension from your sixties to your late thirties or early forties.
Immediate Pension versus EDP
People often ask where the Early Departure Payment fits into AFPS 75, and the short answer is that it does not. AFPS 75 has no EDP at all. The Immediate Pension is its early-payment mechanism, and the two things do the same job of getting money to you before normal pension age, just through different schemes.
The EDP belongs to the newer schemes, AFPS 05 and AFPS 15, which do not pay an immediate pension and instead offer an EDP income and lump sum to qualifying early leavers. If you have service in more than one scheme, which is common for anyone who was serving in 2022, you might end up with an AFPS 75 Immediate Pension for your older service and a separate arrangement for your newer service. For how that other route works, see the Early Departure Payment guide.
The practical upshot is not to go hunting for an EDP on your AFPS 75 record, because there is not one. Your early money from AFPS 75 arrives as the Immediate Pension and its automatic lump sum, and that is the whole of it.
Resettlement commutation on top
On top of the automatic lump sum, AFPS 75 lets you give up part of your annual pension in exchange for extra tax-free cash at the point you take your Immediate Pension. This is resettlement commutation, and it is aimed squarely at people leaving to set up in civilian life who could use a larger sum up front, for a business, a mortgage deposit, or simply a cushion while they find their feet.
It is a trade, though, not free money. You are surrendering a slice of guaranteed lifetime income for a one-off payment now, and whether that is worth it depends entirely on your circumstances. The mechanics, the limits, and how the given-up pension is handled are covered in resettlement commutation.
Commutation sits on top of, not instead of, the automatic three-times lump sum. So a full Immediate Pension package can be three things at once: the annual pension, the automatic tax-free lump sum, and, if you choose it, a further commuted sum on top.
Commissioned from the ranks
There is a wrinkle for people commissioned from the ranks, because it decides whether you leave on officer terms or other-rank terms. If you are a commissioned officer with at least 5 years' service as an officer, you qualify for the officer's Immediate Pension after 16 years' qualifying service from age 21, the same as any other officer.
If you were commissioned but served fewer than 5 years as an officer, you do not get the officer basis. Instead your pension is worked out on the OR-9 (Warrant Officer Class 1) rate with an addition for your commissioned service, and it follows the other-ranks route of 22 years from age 18. It is worth knowing which side of that 5-year line you fall on, because it changes both the qualifying period and how the pension is calculated.
For anyone who spent most of a career in the ranks and commissioned late, this is an easy one to get wrong, so it is worth confirming against your own record rather than assuming.
How to check and what to do next
This site is independent and is not affiliated with the MOD, Veterans UK or JPAC, and the figures here are estimates rather than regulated financial advice. Use them to understand how your Immediate Pension is put together and to sense-check what you are being told, then confirm the actual numbers with an official Veterans UK forecast before you make any real decision.
Start by pinning down your rank basis and your reckonable service from your accrual start age, because those two things decide whether you have reached the IP point and how big the pension will be. Your annual benefit statement is the quickest place to read that off, and a Veterans UK forecast is the authoritative version when it is time to act.
If you are weighing when to leave, model it both ways, just short of the milestone and just past it, so you can see the preserved-versus-immediate difference in black and white. For the bigger calls, especially anything involving commutation or a McCloud remedy choice, taking regulated advice alongside the official forecast is money well spent.
Frequently asked questions
James Hartley
James Hartley spent 22 years in the British Army, including unit personnel administration and pensions and records duties, and now writes the scheme guides and scenario pages on this site. He is not a regulated financial adviser, so the content is general information rather than personal advice.
Sources: gov.uk · GAD factors · Veterans UK · Forces Pension Society · MoneyHelper.