MOD never told 60,000 early leavers about a pension right they already had
For nineteen years, everyone who left the armed forces with at least three months but under two years' service should have received a written notice explaining that they had a right to move the value of their pension into another scheme. Nobody ever did. MOD admitted the failure in December 2025, its accounts now carry up to 60,000 affected people and a £45 million liability, and as at July 2026 the exercise to contact those people had still not begun. What the entitlement actually is, and what you can do about it, is set out on our cash transfer sum guide.
Key takeaways
- Since 6 April 2006, short service leavers have had a statutory right to a cash transfer sum. MOD never issued the notice the law requires to a single one of them.
- The failure surfaced only in November 2024, through one member's Internal Dispute Resolution Procedure claim.
- MOD's own accounts put the population at up to 60,000, made up of around 36,000 regulars and up to 25,000 reservists, with £45 million of liability restored to the balance sheet.
- The Comptroller and Auditor General reported on 7 July 2026 that the exercise to contact historic early leavers had not commenced.
- The right applies to AFPS 75, AFPS 05 and AFPS 15 alike, and most of the affected population is legacy-scheme.
- No MP has asked a written question about it, and it has drawn no national press coverage.
What MOD admitted
The Pension Schemes Act 1993 requires an occupational pension scheme to write to any member whose pensionable service ends with at least three months but under two years, explain that they have a right to either a cash transfer sum or a refund of contributions, tell them how to use it, and give them a reasonable period to decide. Those provisions came into force on 6 April 2006.
MOD's position, in its own words, is that it "has failed to provide 'Early Leavers' with this written notice and inform them of their right to transfer their pension benefits to another scheme or claim a contribution refund since the provisions were introduced on 6 April 2006".
The failure was not found by an audit or a review. It surfaced in November 2024 because one member brought an Internal Dispute Resolution Procedure claim. MOD published a one page notice on gov.uk in December 2025, and disclosed the issue properly in the Armed Forces Pension Scheme Annual Report and Accounts 2024-25, laid before Parliament the same month.
The entitlement itself is not in dispute and never was. The right arises automatically the day pensionable service ends. What MOD failed to do was tell anyone it existed, which is the step that makes the right usable.
The scale, and the money
The accounts are specific. Analysis estimates that up to 60,000 ex-service personnel could be impacted since April 2006, made up of around 36,000 early leavers from regular service and up to 25,000 reservists.
The financial effect is a prior period adjustment. The scheme had set aside the liabilities correctly when the service was earned, then cleared them down without anyone being offered the settlement they were owed. Those liabilities have now been put back.
| Item | Figure |
|---|---|
| People affected since April 2006 | Up to 60,000 |
| Regular service leavers | Around 36,000 |
| Reservists | Up to 25,000 |
| Recognised in the 2024-25 accounts | £41.5 million |
| Further adjustment in 2025-26 | £3.5 million |
| Total provision | £45 million |
Do not divide the £45 million by the headcount. The provision is already net of an assumption that only around half of those eligible will come forward, so the arithmetic does not produce a per-person figure. MOD has published no per-member value, average or range.
One number in circulation does not reconcile. The Forces Pension Society said on 11 August 2026 that the exercise covers "some 40,000 early leavers". Its own earlier statements, in January and February 2026, used 60,000, which is what the accounts say. The 40,000 may be a partial recollection of the c.36,000 regular figure. The accounts are the better source.
Nineteen years on, it still has not started
MOD said in December 2025 that the administrative processes and systems required to confirm eligibility and deliver redress were "being urgently developed", and that a further update would follow including how affected members would be contacted.
That update has not appeared. The Comptroller and Auditor General reported on 7 July 2026 that the scheme "has not yet implemented the necessary process changes" and, more pointedly, that "the exercise to communicate with historic early leavers has not commenced".
There is a conflict of evidence here worth flagging. The Forces Pension Society said on 11 August 2026 that those leaving now are being informed of their entitlements. The C&AG's finding a month earlier was that the process changes were not yet in place. We have followed the C&AG, which is the audited source. If you are leaving now with under two years' service, ask before you go rather than assuming you will be told.
As at today there is no published contact route, claim form, deadline or timetable for the historic exercise. MOD's fix for future leavers is tied to a system implementation scheduled for early 2027, and that date covers the forward-looking process only, not the people already affected.
Nobody has asked about it
What makes this unusual is not the failure. It is the silence around it.
We swept every Ministry of Defence written question answered between 3 November 2025 and 19 August 2026, 5,327 in total, for the terms an MP would use: early leaver, cash transfer sum, contribution refund, qualifying service, Pension Schemes Act. There are no hits. As a control, the same sweep correctly returned the known written questions about the Equiniti pension overpayments, so the nil result is real rather than a broken search.
In other words, a nineteen-year statutory breach affecting up to 60,000 veterans and carrying a £45 million provision has not been the subject of a single parliamentary written question. It has also drawn no national press coverage, in contrast with the pension overpayment story running alongside it, which has been covered by the Telegraph, the Times and the Daily Mail and has prompted an active campaign.
To be precise about the limits of that check: it covers written questions only. Oral questions, Westminster Hall debates and select committee evidence use different records and were not swept, so this is not a claim that Parliament has never discussed it.
What this means if you served under two years
If your pensionable service ended on or after 6 April 2006 with at least three months but under two years, you are probably in the affected group, whether you were a regular or a reservist, and whether you left or simply opted out of the scheme.
The most important point is that waiting has not cost you the right. The one thing that normally ends it is failing to reply by a reply date, and a reply date only exists if the scheme sent you the statement that sets one. None were sent, so no clock was validly started. A six-month window quoted in the AFPS 15 booklet is the scheme's own, and it runs from that same notice.
- Check your contact details with Veterans UK. MOD has not said how it will trace people, and this is the single most useful thing to fix now.
- You do not have to wait for the exercise. The right exists independently of it, so you can ask for a statement of your early leaver entitlement now. Expect it to be slow, because the process does not yet exist.
- Expect a transfer, not a cheque. A cash transfer sum can only be paid into another pension. Only the refund limb produces cash, and in a non-contributory scheme that limb is usually nil.
- Do not pay anyone to claim it for you. There is no published claim process to navigate, and an unsolicited offer to release an armed forces early leaver payment follows a known scam pattern.
The entitlement, explained in full
What a cash transfer sum is, who qualifies, why it covers AFPS 75 and 05 as well as 15, and how it is valued.
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.