We are profoundly grateful for the service of members of our armed forces, and therefore it is only right that they are entitled to a pension that ensures dignity in retirement. Members of the Armed Forces Pension Schemes do not have to pay contributions to their pension schemes. These are the only public service pension schemes that are non-contributory.

The government currently has no plans to make Armed Forces pensions tax free at age 60. The Armed Forces Pension Scheme provides tax-free lump sums to members on retirement. Other pension payments from the Armed Forces Pension Scheme are treated as taxable income under UK tax law. This tax treatment reflects the fact that pensions are forms of deferred income and as such are taxable. This same tax treatment applies to payments from all occupational pension schemes.

HM Treasury