Threat to PM pledge regarding Armed Forces Covenant

Rumours, in the media, of consideration being given by the Chancellor to cutting the pension tax-free lump sum allowance (LSA) in the next budget, are causing alarm among members of the Forces Pension Society and the wider Military Community.

If such a tax is imposed, it will impact everyone serving in the Armed Forces. This comment is typical of those we are receiving: “My plan, to ensure my family’s financial security, relies on the lump sum payment, as it has been promised for the over 25 years I’ve already served.”

Political decision-makers must understand the purpose of the Armed Forces Pension Scheme. It is to sustain operationally effective Armed Forces by incentivising service and providing a financial platform for a second career, as a demonstration of the nation’s commitment to those who have served their country – as enshrined in the Armed Forces Covenant. Reneging on this promise would be corrosive and undermine the confidence of those who serve, that the Government will honour its obligations – and all that implies for Armed Forces retention.

A promise
On 28 June, the Government announced it would enshrine the Armed Forces Covenant in law, with the Prime Minister stating:
“I made a promise to serve those who have served us. Through the new Armed Forces Covenant, we are delivering on that promise… our Armed Forces Covenant will put our Armed Forces community at the very heart of government decision-making.”

This was accompanied by a pledge for a “wider commitment to renew the contract with those who have served the country, ensuring they are treated with respect and long-term security.”

CEO of the Forces Pension Society, Neil Marshall, said: “We trust these media rumours are just that – rumours. If not, the Prime Minister will risk reneging on the promise he made to the Armed Forces just a few weeks ago.”

Providing guidance
The Forces Pension Society is an independent, not-for-profit organisation that provides pension guidance to those serving and retired, across all three services, and represents the pension interests of the whole Military Community. Last year, the Society’s expert Forces Pensions Consultants dealt with almost 30,000 pension enquiries.

Membership of the Society is growing and currently numbers more than 66,000.

If you are a Member of the Forces Pension Society and have pension-related questions, please contact us via ‘Submit a question’ in the Members’ area of the website. If you are not a Member but would like to learn more about us, visit:

For more information, visit: www.forcespensionsociety.org