EDP and Immediate Pension: What You Get and When

Most people leaving the Armed Forces before normal pension age do not simply wait years with nothing coming in. The pension schemes contain specific bridging mechanisms designed to put money in your pocket from the day you leave. Understanding exactly which mechanism applies to you, what it pays, and when it stops is one of the most practically important financial decisions you will face before discharge.

This article covers the Early Departure Payment (EDP) across AFPS 05 and AFPS 15, the Immediate Pension under AFPS 75, how the two differ, and what you need to know before choosing a leaving date. It does not replace a personalised pension forecast from Veterans UK, but it gives you the framework to have that conversation well-informed.

The Three Schemes and Why They Matter

Since 1 April 2022 everybody has been a member of AFPS 15, and many will have protected rights in AFPS 05, giving potential Early Departure Payment entitlements under both schemes.

If you joined before 6 April 2005 and elected to stay on AFPS 75, or were transitionally protected, you may hold AFPS 75 rights as well. Your leaving date and your scheme membership together determine which benefits activate and when.

The EDP exists on AFPS 05 and AFPS 15 only. AFPS 75 does not have an EDP.

The older 1975 scheme handles early leaving through its own Immediate Pension and resettlement arrangements instead.

This distinction matters enormously because the Immediate Pension and the EDP are structured very differently.

The AFPS 75 Immediate Pension

Those who leave the service before age 55 after at least 16 years’ qualifying service for officers, and 22 years’ qualifying service for other ranks, will receive an immediate pension.

For officers, qualifying service starts from age 21. For other ranks, this begins from age 18. In addition to an immediate pension, a tax-free lump sum equal to three times the annual pension is also payable.

The word “immediate” is significant. Unlike EDP, this is a full pension paid from the day you leave, not a bridging payment. However, the indexation rules are unusual.

The pension is paid at a flat rate until age 55, when all the inflation increases are applied. After age 55 the pension increases by Consumer Price Index (CPI) every year.

This means your AFPS 75 immediate pension buys less in real terms each year until you reach 55, at which point the accumulated CPI increases are applied in one adjustment. Factor this in when planning your income for the years immediately after leaving.

The EDP Under AFPS 05: The 18/40 Point

To qualify under AFPS 05, a person must cease to be in service on or after attaining the age of 40 and before attaining the age of 55, and must have completed a number of years’ relevant service that equals or exceeds 18 years.

This is known as the 18/40 point.

Those meeting the AFPS 05 criteria and leaving before age 55 will get EDP benefits. These comprise a tax-free lump sum worth three times the preserved pension and an income worth at least 50% of the preserved pension. For every year served beyond the 18/40 point the income increases by 1.667% of the value of the preserved pension.

The periodical payments are effectively 50% of the deferred pension until age 55, when the income increases to 75% of the deferred pension. The EDP 05 payments begin the day after you leave the service and end with the day before your 65th birthday.

At age 65 your AFPS 05 preserved pension comes into payment as a separate entitlement.

One critical rule:

for EDP 05, you must be leaving before 55, which is the AFPS 05 normal pension age. Serve to 55 and you leave with an immediate pension instead.

Reaching 55 with qualifying service is therefore a better outcome than an EDP, because it means a full pension from that day rather than a bridging arrangement.

The EDP Under AFPS 15: The 20/40 Point

To be eligible for an Early Departure Payment under AFPS 15, you must be a member of the Regular Forces and eligible to belong to AFPS 15, cease to be in Regular Service on or after the age of 40 and before the age of 60, and have completed at least 20 years of continuous or aggregated Regular service in the Armed Forces.

This is known as the 20/40 EDP point, since both the 20-year and age-40 marks have to be passed.

Both conditions must be satisfied simultaneously.

The age and service tests are hard lines, not sliding scales. Being 39 and 11 months with 21 years in does not earn you an EDP, and neither does being 42 with 17 years.

If you qualify,

you will receive a tax-free lump sum equal to 2.25 times your annual deferred pension. You will also receive a taxable monthly income worth 34% of the value of your annual deferred pension. For each year served beyond the 20/40 EDP point, the value of the EDP will be increased by 0.85% of your deferred pension.

From age 55, the EDP income is adjusted to take account of annual increases in the Consumer Price Index. Since an EDP is not a pension, once you reach State Pension Age, the EDP income stops.

At this point, your deferred pension becomes payable.

There is also an option to restructure the lump sum.

You can choose to give up your full EDP lump sum to increase the monthly EDP income. This is known as inverse commutation.

Whether this makes sense depends on your immediate cash needs and your long-term income requirements. It is worth modelling both options before you decide.

A Side-by-Side Comparison

AFPS 75 Immediate Pension:
available after 22 years (non-commissioned) or 16 years (commissioned).

Paid immediately on leaving. Tax-free lump sum of three times the annual pension. Income held flat until age 55, then CPI-adjusted.

AFPS 05 EDP:
broadly 18 years’ service and at least age 40.

Tax-free lump sum of three times the preserved pension. Monthly income at 50% of the preserved pension rising to 75% at age 55. Stops at age 65 when the pension comes into payment.

AFPS 15 EDP:
broadly 20 years’ service and at least age 40.

Tax-free lump sum of 2.25 times the deferred pension. Monthly income at 34% of the deferred pension. CPI uplift from age 55. Stops at State Pension Age when the deferred pension comes into payment.

The EDP Is Not Your Pension

The EDP does not use up your pension. The full pension is always payable from Normal Pension Age.

The EDP and the pension are entirely separate calculations. The EDP is paid first, as a bridge across the gap years, and then your preserved or deferred pension begins once the EDP stops. You do not have to choose between them.

With a preserved pension and no EDP, there is no bridging income in the gap years; you wait until pension age and then draw the preserved pension. That is a real difference to your cash flow in the years immediately after leaving, which is exactly why the EDP thresholds are worth taking seriously when you choose a leaving date.

What Happens If You Rejoin

Rejoining the Regulars or taking a Full Time Reserve Service post has consequences.

On re-joining the Regulars or a Full Time Reserve Service post, the AFPS 05 EDP income stops and restarts when you leave again. Depending upon how quickly the individual re-joins, the EDP lump sum may have to be repaid on undertaking further service.

The same principle applies to AFPS 15 EDP income. If you are considering FTRS or a return to Regular service, check the position with Veterans UK before committing.

Death in Service and Your Family

If you die in service before reaching pension age, the position under AFPS 15 is clear.

If you die in service, your spouse, civil partner or eligible partner will receive an immediate pension paid for life, and a tax-free lump sum amounting to four times your final pensionable earnings.

This is the figure referred to across Absolute Military’s product range as the AFPS 15 death in service benefit. It is significant, but it is worth confirming that your nominated beneficiary details held by the scheme are current.

The death in service lump sum alone does not replace the income a family relied on from a serving member’s pay. That is why many serving personnel choose to hold life cover or serious illness cover alongside their scheme benefits. You can explore the options that complement your AFPS position via our Vitality Coach service.

Three Things to Do Before You Leave

Request a pension forecast. Veterans UK will produce a forecast based on your actual service record. Do not rely on estimates alone when planning your finances around discharge.
Check your leaving date against the qualifying thresholds. A matter of weeks can be the difference between qualifying for an EDP and receiving nothing until pension age. The thresholds are hard lines, and the financial gap between qualifying and not qualifying can be substantial.
Review your protection position. Your EDP or immediate pension replaces service pay, but it does not cover everything. Serious illness, death, and personal accident during the transition to civilian life all carry financial risk. Our Vitality Coach page sets out the options available to serving and recently discharged personnel.

Frequently Asked Questions

What is the difference between an EDP and an immediate pension?

An immediate pension, available under AFPS 75, is a full pension paid from the day you leave service, with a tax-free lump sum of three times the annual amount.

Early Departure Payments are a feature of the Armed Forces Pension Scheme specifically for those leaving the service before the typical retirement age. They offer a combination of a lump sum and regular, taxable income payments to compensate for the shorter career length.

An EDP is a bridging payment, not a full pension, and it stops once your preserved or deferred pension comes into payment.

Do I qualify for an EDP if I leave at age 40 with exactly 20 years’ service under AFPS 15?

To be eligible for EDP 15 you must be a member of the Regular Forces and eligible to belong to AFPS 15, cease to be in Regular Service on or after the age of 40 and before the age of 60, and have completed at least 20 years of continuous or aggregated Regular service.

So yes, reaching both conditions at the same point qualifies you. The key word is “at least” on both counts. Miss either threshold and there is no EDP.

Does the EDP lump sum reduce the pension I receive at State Pension Age?

There is a tax-free lump sum paid as a single payment when you leave, and there is a monthly income that runs from your leaving date until your preserved or deferred pension comes into payment. When that pension finally starts, the EDP monthly income stops. Your preserved pension and its own lump sum are untouched and waiting for you, calculated separately from anything the EDP pays out.

The EDP does not reduce the pension you have built up.

Is EDP income taxable?

The lump sum element of the EDP is tax-free.

Early Departure Payments are a feature of the Armed Forces Pension Scheme specifically for those leaving before the typical retirement age. They offer a combination of a lump sum and regular, taxable income payments.

The monthly EDP income is treated as taxable income in the same way as any other earnings. Once you begin a second career or take on other taxable income, your EDP income is added to that for the purposes of calculating your tax liability.

What happens to my EDP if I rejoin the armed forces?

On rejoining the Regulars or undertaking a Full Time Reserve Service post, an individual’s EDP 05 income stops.

The same principle applies under AFPS 15. The income restarts when you leave again, but there may be implications for the lump sum depending on how quickly you rejoin. Always get a written confirmation of the position from Veterans UK before you sign any re-engagement paperwork, so you know exactly what you are giving up temporarily and for how long.

Where to Go Next

Your EDP or immediate pension is one part of the financial picture at discharge. It does not replace income protection, life cover, or serious illness cover. For serving personnel planning their transition, understanding both their scheme benefits and the gaps those benefits leave is the starting point for sound financial planning. To see what is available to complement your AFPS position, visit our Vitality Coach page or read the latest analysis in our September 2026 Market Review.

Absolute Military is authorised and regulated by the Financial Conduct Authority (FCA reference 796907), a trading style of Just Advice Solutions Ltd. This article is for information only and does not constitute personal financial advice. For advice tailored to your circumstances, please speak to a qualified adviser.