Armed Forces, Police & Firefighters' Pensions: Annual Allowance & McCloud

Watch the explainer · 35 s

McCloud and the Armed Forces Pension Scheme

35 s · Captions on · Official sources checked 30 September 2026
Watch on its own page

The three schemes side by side

All three are career-average schemes introduced in 2015, and all three moved their members fully onto the 2015 scheme from 1 April 2022.

Scheme	2015 accrual rate	Active revaluation	Normal Pension Age	Who administers
Armed Forces (AFPS 15)	1/47 (non-contributory, 0% member contribution)	Average Weekly Earnings (an earnings index, not CPI)	60	Veterans UK (Defence Business Services, MOD)
Police (2015)	1/55.3	CPI plus 1.25% while active	60 (earliest 55, reduced)	Each force's pension authority in England & Wales (Home Office sets policy); the Scottish Public Pensions Agency in Scotland; PSNI Pensions Branch in Northern Ireland
Firefighters (2015, England)	1/59.7 (about 1.675%)	Average Weekly Earnings (an earnings index)	60 (earliest 55, reduced)	Each Fire and Rescue Authority. Wales, Scotland (the Scottish Public Pensions Agency) and Northern Ireland (HSC Pension Service, for NIFRS) run their own firefighters' schemes

Sources:GOV.UK: armed forces pensions GOV.UK: police pension schemes Firefighters' Pensions GOV.UK: public service pension remedy

The McCloud remedy across the uniformed schemes

From 1 April 2022 everyone still serving in the armed forces, police or fire service builds pension in the reformed 2015 scheme. For the remedy period, 1 April 2015 to 31 March 2022, the McCloud remedy applies.

Who is in scope:

•You were in pensionable public service on or before 31 March 2012, and in service on or after 1 April 2015.

•You had no gap in service of more than five years in between.

How it works:

•On 1 October 2023, in-scope members' remedy-period service was moved back ("rolled back") into their legacy scheme.

•If you were serving or had a deferred pension on 30 September 2023, you choose legacy or 2015 benefits for that period at retirement, when the scheme shows you both figures. This is the Deferred Choice Underpin.

•If you were already receiving your pension on 30 September 2023, you have an immediate choice instead: 12 months from the date of your remediable service statement, and the choice cannot be changed.

•In the Armed Forces, deferred choice members have six months from their statement to choose, and get legacy benefits if they do not.

The legacy schemes:

•Armed Forces: AFPS 75, AFPS 05, EDP 05, FTRS 97, RFPS 05 and NRPS 11

•Police: the 1987 and 2006 schemes

•Firefighters: the 1992 and 2006 schemes

For firefighters, this is the Sargeant half of the combined McCloud and Sargeant judgment. The remedy can change your Annual Allowance position for the remedy years, so a past pension-tax charge may need revisiting.

Source: https://assets.publishing.service.gov.uk/media/6a0704acee62840dba48a353/Your_2015_Pension_Remedy__Explained___booklet_8.pdf

Why a promotion can trigger an Annual Allowance charge

Across the uniformed schemes, a promotion to senior rank or officer is the classic trigger for an unexpected pension-tax bill.

Why a promotion matters:

•A step up in rank raises your pensionable pay, which raises how fast your promised pension grows.

•That growth is valued at 16 times the yearly increase, so one large rise can cross the £60,000 Annual Allowance.

•The scheme may not warn you, because it does not always know your other income or pensions.

Also worth watching: overtime and allowances can raise your income and taper your allowance, even when your basic pension build looks steady.

Source: https://www.gov.uk/guidance/pension-schemes-work-out-your-tapered-annual-allowance

When professional fees can be reimbursed

Each scheme has its own McCloud remedy route. These are discretionary and have no set cap; your pack flags what applies to you and the deadline.

Armed Forces

The Armed Forces remedy compensates direct financial loss, including professional fees where expert advice was genuinely needed.

•Decided case by case, with no published cap. Itemised receipts required.
•Claimed through the MoD remedy compensation form, normally after your remedy statement.

Police

For complex remedy cases, your force can reimburse accountancy and financial-adviser fees.

•Decided case by case by your force, with no set cap, against actual documented cost.
•Apply within about six months of your remedy election, and seek pre-authorisation where you can.

Firefighters

Each Fire and Rescue Authority can reimburse reasonable accountancy and adviser fees arising from the remedy.

•Decided case by case, with no set cap, reasonable and proportionate to the loss.
•Apply around six months from your remedy election. Any capped figures you see online are Scotland’s separate scheme, not England’s.

Related guides

These guides cover the questions that usually come up next. They are written with NHS examples, but the Annual Allowance and McCloud rules they explain apply right across the public sector.

Annual Allowance

The £60,000 limit, the 16x valuation, and the taper explained.

Carry Forward

Use unused allowance from earlier years to reduce a charge.

McCloud Remedy

How the remedy period works and what your statement will show.

Illustrative, and independent

This guide compares three separate schemes and their shared McCloud framing; your own position depends on your service, income and scheme rules. The reclaim routes shown are discretionary and time-limited. This guide is educational and is not personal advice. Remedy is not affiliated with the MOD or Veterans UK, any police force or Fire and Rescue Authority, or HMRC.