The annual CPI increase applied to armed forces pensions, year by year. Pensions in payment and preserved pensions are both uprated each April.
Every armed forces pension is index linked, which means it is increased each year to help it keep pace with the rising cost of living. This is one of the most valuable features of the schemes and one of the least understood. The increase is not discretionary, it is not set by the Ministry of Defence year by year, and it is not a bonus that can be withdrawn. It is built into the rules of AFPS 75, AFPS 05 and AFPS 15 alike, and it is applied automatically. The point of this page is to explain exactly how that yearly rise is calculated, when it lands, who receives it, and what it is worth in pounds rather than percentages.
The mechanism is the same one used across the whole public service, sometimes called the Pensions Increase. Each April, pensions are raised in line with the Consumer Prices Index, the official measure of inflation published by the Office for National Statistics. Because armed forces pensions ride on this national mechanism rather than a scheme specific formula, the percentage you receive is identical to the rise given to teachers, nurses, civil servants and other public service pensioners in the same year. What differs is only the size of your pension, not the rate of increase.
The annual increase follows a fixed and predictable rhythm, which is worth learning because it lets you anticipate next year's rise before it is even announced. The rule is straightforward: the increase applied in April is the Consumer Prices Index for the year to the previous September. A single reference month, September, is used so that the figure can be confirmed in good time and applied to every pension on the same date.
The timeline runs like this. Inflation data for September is gathered and then published by the Office for National Statistics in the middle of October. That September CPI figure becomes the uprating percentage. It is confirmed by ministers later in the autumn, and it takes effect the following April, from the first Monday of the new tax year. So there is a deliberate gap of roughly six months between the inflation being measured and the increase reaching your pension. The benefit of that lag is certainty: by the time you reach April you already know precisely what your rise will be, because it was locked in the previous October.
Two features of this mechanism matter in practice. First, it uses CPI rather than the older Retail Prices Index, and CPI is generally the lower of the two, which is simply the basis the public service schemes settled on. Second, the increase can never be negative. If September CPI came out at zero or below, your pension would hold steady rather than fall, because the schemes do not claw back value in a year of falling prices. In every normal year, though, the September CPI figure is positive and your pension goes up by that amount.
In short.April's increase equals the previous September's CPI. It is applied automatically, it is the same percentage across the public service schemes, and it cannot be a cut. For 2026 that figure is 3.8%.
The last three years show clearly how much the rate can swing with inflation, and why it is unwise to assume any fixed figure when you plan ahead. Each rate below is the September CPI from the year before, applied from the April shown.
The jump from 6.7% to 1.7% and back up to 3.8% in three consecutive years is the clearest possible illustration of why the increase is described as index linked rather than guaranteed at a set level. It moves with the economy. In years when prices race ahead, the increase is generous and does its job of protecting your spending power. In calmer years it is modest, because there is less ground to make up. Over a long retirement the swings tend to even out, and the cumulative effect of compounding each year's rise on top of the last is substantial, which we look at in the worked example below.
You can read the detail behind any single year, including the exact reference month and how the rate was set, on the individual year pages linked at the top of this page.
If you are already drawing your armed forces pension, the increase reaches you in the simplest way possible. From the effective date in April, your monthly pension payment is recalculated at the new, higher level, and you receive that higher amount from then on. There is nothing to claim, no form to return, and no decision to make. The pension administrator applies the same percentage to every pension in payment on the same date.
There is one detail that catches people out in their first year of retirement. The increase is applied in proportion to how long your pension has been in payment over the preceding year. If your pension only started part way through the year, you receive a corresponding fraction of the full increase that first April, rather than the whole percentage. From the following April onwards you receive the full annual uprating like everyone else. So a first year rise that looks smaller than expected is usually this proportioning at work, not an error.
It is worth being clear about what the increase touches. It applies to your pension income, the regular sum paid to you. It does not retrospectively increase a tax free lump sum that has already been paid out, because that money is already in your bank rather than held in the scheme. Early Departure Payment income is handled under its own timing rules before it converts, but once a pension proper is in payment, the April CPI rise is what keeps it level with prices for the rest of your life.
Not everyone is drawing their pension yet. If you have left the armed forces with at least the qualifying service but have not yet reached the age at which your pension is paid, you hold what is called a preserved pension, sometimes known as a deferred pension. The crucial point is that a preserved pension does not sit frozen at the cash value it had on the day you left. It is revalued every year, using the very same CPI mechanism, so that it keeps its real value over what can be a wait of many years.
This matters enormously for early leavers. Consider someone who leaves with a preserved pension at age 38 under AFPS 15, with their pension not payable until State Pension age. Without revaluation, the figure on their leaving statement would be eaten away by decades of inflation, and by the time it came into payment it might be worth a fraction of what it represented at the point of leaving. Because it is revalued by CPI each year while preserved, it instead arrives with its buying power broadly intact. The same protection applies to preserved AFPS 75 and AFPS 05 pensions, and to the lump sums attached to them, which are revalued alongside the pension until they are drawn.
So the annual increase has two jobs that depend on your stage of life. For pensions already in payment, it is a yearly rise added to the income you are receiving. For preserved pensions, it is a yearly revaluation that protects the value of money you have not yet started to draw. The percentage used is the same in both cases. The difference is simply whether you see it as more income now or as a stronger starting figure later.
Worth remembering. Leaving the armed forces does not stop your pension keeping pace with inflation. A preserved pension is revalued by CPI every year until you draw it, so the wait does not erode its real value.
Percentages are abstract, so it helps to follow a single pension through the last three increases and watch the pounds move. The figures below are illustrative. They use a round starting pension to make the arithmetic clear, and they are meant to show the mechanism, not to predict your own pension. For your actual figures, request an official forecast from Veterans UK.
Imagine a veteran whose armed forces pension was £12,000 a year as it stood just before the April 2024 increase. Watch what each year's CPI rise does to it.
Over those three increases the pension has grown from £12,000 to roughly £13,517, a gain of about £1,517 a year, or near 12.6% in total. Notice that this is more than simply adding 6.7, 1.7 and 3.8 together, which would be 12.2%. The difference is compounding: each year's increase is applied to the already increased pension, so you earn a small rise on top of previous rises. Over a long retirement that compounding is precisely what keeps a pension level with the cost of living rather than slowly falling behind it.
The same arithmetic works in reverse to help you plan. If you want to estimate next April's payment, take your current annual pension and add the expected CPI percentage. If you hold a preserved pension, apply the same step each year between now and the date you intend to draw it, and you will see roughly where the starting figure should land.
Starting pension of £12,000 a year chosen for clarity. Increases applied in full each April with no first year proportioning, using the confirmed rates of 6.7% (2024), 1.7% (2025) and 3.8% (2026). Figures rounded to the nearest pound. Illustrative only, not a forecast of any individual pension.
Sources:gov.uk Armed Forces pensions and Pensions Increase guidance · Office for National Statistics CPI data · Veterans UK. This site gives estimates, not regulated financial advice, and is independent and not affiliated with the MOD, Veterans UK or JPAC. For an official figure, request a forecast from Veterans UK (form 12 if serving, form 14 if preserved).