Receiving my pension

Most workplace pension schemes allow you to access your pension between the ages of 55-60 with the exact date depending on the type of scheme.

The most common armed forces pension for current serving personnel is the Armed Forces Pension Scheme 2015, or AFPS 15. If you joined the armed forces on or after 1 April 2015, you are in this scheme.

You can claim your AFPS 15 pension at your State Pension age, or from age 55 with a reduced amount. This reduction is called an actuarial reduction, and it reflects the fact that the pension would be paid over a longer period than the scheme originally assumes.

Depending on when you served or if you had separate periods of service, you may also have benefits in earlier schemes such as AFPS 75, AFPS 05 or RFPS 05. In this case, different parts of your pension may be payable at different ages.

You can find out more about how and when you can receive your armed forces pension by visiting gov.uk.

If you’re a reservist, veteran, spouse, partner, or family member, it’s still useful to understand these rules, as armed forces pensions often form part of wider household income and long-term planning. It’s also important to understand how other types of pensions work, as many people in the armed forces community will also have a personal pension, a workplace pension from civilian employment, as well as the State Pension.

If you have an older workplace scheme that you were a member of before April 2006, you may have a protected retirement age that is lower than 55.

You don’t have to start taking money from your pension pot when you reach your given retirement age. In fact, many people choose to work longer so their pension pot can grow more, among other reasons. Leaving it invested could mean more tax-free growth.

Personal pensions can be accessed from the normal minimum pension age. From that age, you can usually take up to 25% of your pot tax-free as a lump sum, even if you don’t retire at that point.

Taking any more at this point will be taxed at your marginal tax rate – the normal income tax band for regular earnings. Your pension will form part of your total income and will be taxed depending on which tax band it falls into.

The first portion of your total income that falls into the personal allowance will have no tax. Any income you have above the personal allowance will be taxed at rising amounts. You can learn more about tax bands in another video.

In the case of a State Pension, the pension service will contact you four months before your State Pension age. However, when you are close to State Pension age, you will need to claim it. It doesn’t start automatically.

If the pension service doesn’t contact you, then get in touch with them at least two months before State Pension age.

You should start preparing to claim any pensions at least six months before you want to retire, especially if you’ve had multiple jobs. Multiple jobs usually means multiple pension pots, so there will be some admin to do to make sure you get everything you are entitled to.

In the case of workplace pensions, you must contact the provider or your old employer. Some may send you information, but it’s your responsibility to act.

When preparing to take a personal or defined contribution pension, you’ll need to choose how to take the money. Alongside the decision to take the 25% tax-free lump sum, your choices will include drawdown and annuity.

With drawdown, the money is left invested in your pension to keep growing, but you draw money from the funds as income periodically, or a lump sum when you need it. Purchasing an annuity from an insurance company converts all of your pension savings into an annual pension, giving income for life.

You can mix the pension options by using some of your pot for pension drawdown and some to buy an annuity. If you don’t claim your pension, it remains invested or held by the provider. You won’t receive any payments even if you’re entitled, and you might miss out on money, especially if you’re relying on that income in retirement.

Thousands of armed forces pensions go unclaimed each year because they are not paid automatically. If you have a preserved pension from earlier service, you will usually need to claim it. As you approach age 60, you should complete and send the AFPS Preserved Pension form to start receiving your pension.

For more information on how to do this, visit gov.uk or contact the Veterans UK helpline.

Be aware of scammers offering “early access” to pensions before age 55 or 57 from 2028, which is usually illegal and can result in big tax charges.

Planning when and how to take your pension can feel like a big step, but you don’t have to do it all at once. Start by checking what pensions you have, what age you can access them and the options available. This applies whether you’re serving, have served, or are supporting someone who has.

Remember, the choices you make can shape your retirement income for years to come. So take your time and ask for advice if you need it. Understanding your options now will help you feel more confident and secure when the time comes to retire.