The armed forces Resettlement Grant

What the Resettlement Grant is

The Resettlement Grant is a fixed, tax-free lump sum paid on leaving. Its purpose is in the name: it helps with the cost of resettling into civilian life for people who have given a substantial part of a career to the forces but who leave before the scheme starts paying them anything ongoing.

The important word is fixed. Unlike your pension, which depends on your pay, your rank and your reckonable service, the Resettlement Grant is a flat amount set by your scheme. Two people leaving on the same day from the same scheme receive the same grant, whatever their rank, with the single exception of the officer and other ranks split on AFPS 75.

It is paid once, on leaving, and it does not affect the preserved pension you keep for later. Taking the grant does not give anything up.

How much the Resettlement Grant is worth

The figures below are the values gov.uk publishes as at April 2025, which are the most recent it has published. There was no separately published April 2026 figure at the time of writing, so treat these as the working numbers and confirm your own with Veterans UK.

On AFPS 75 the grant is 20,397 pounds for an officer and 14,058 pounds for other ranks. That officer and other ranks split is a feature of AFPS 75 and does not carry across to the later schemes.

On AFPS 05 the grant is 14,059 pounds, and on AFPS 15 it is also 14,059 pounds, with no split by rank. If you hold benefits in more than one scheme because of the McCloud remedy or a re-joining, which scheme's grant applies depends on your leaving position rather than on where your early service sat.

Who qualifies

The grant sits in the gap between two thresholds. Below the first, you leave with a preserved pension and no lump sum on the day. Above the second, you leave with an Immediate Pension on AFPS 75, or an Early Departure Payment on AFPS 05 and AFPS 15, and the grant is not paid because the scheme is already paying you.

The qualifying periods differ by scheme and, on AFPS 75, by whether you are an officer or other ranks. Because those thresholds interact with your exact engagement and your reckonable service dates, this is one of the places where a general figure is genuinely unhelpful. Ask Veterans UK for your own qualifying date rather than working from a rule of thumb.

If you are close to the EDP or Immediate Pension point, the choice of leaving date can be worth a great deal, because crossing it moves you from a one-off grant to an ongoing income. Our guide on which AFPS scheme you are in is the place to start if you are not certain which set of rules applies.

The tax position

The Resettlement Grant is paid tax-free. That puts it alongside the automatic lump sums on AFPS 75 and AFPS 05, any commutation cash on AFPS 15, and the EDP lump sum, all of which are also tax-free. Our armed forces pension tax guide sets out the full picture of what is taxed and what is not.

Tax-free cash across all your pensions is capped by the Lump Sum Allowance, which most members are comfortably under. The Lump Sum Allowance guide explains how the cap works if you have other pension savings alongside your AFPS benefits.

What it is not

It is not resettlement commutation. Resettlement commutation is an AFPS 75 option where you give up part of your pension in exchange for cash, and you pay it back through a permanently reduced pension. The Resettlement Grant costs you nothing and reduces nothing. Our resettlement commutation guide covers that separate option.

It is not the EDP lump sum either. The EDP lump sum is paid to people who do reach the Early Departure Payment point, alongside a monthly EDP income. If you are getting an EDP, you are not getting a Resettlement Grant, because they sit on opposite sides of the same threshold.

And it is not compensation. If you are leaving because of an injury or illness, the AFCS or a medical discharge pension may apply, and those are assessed entirely separately from anything in this guide.