Ignoring This Could Cost You Thousands - EDP Explained

Ignoring This Could Cost You Thousands - EDP Explained

The Early Departure Payment or EDP is a benefit that is unique to the UK Armed Forces and only applies to those on the Armed Forces Pension Schemes 05 and 15.

The benefit sees those that are eligible receive a lump sum payment upon leaving the Forces and a monthly income which is paid up until the Armed Forces Pension becomes payable in their lates 60s.

The lump sum is tax free but the monthly income is taxable. The amounts that are awarded are calculated from the annual deferred pension of the relevant scheme. If a serving personnel has time on both the AFPS 05 and 15, then they are eligible for the EDP on both schemes.

The EDP is used a retention tool as it is aimed at keeping people serving in the Armed Forces until they are at least 40 years old. This is done serving personnel having to meet certain criteria before becoming eligible for the benefit.

On the AFPS 05, the criteria is as follow, they need to have served at least 18 years and be 40 or over BUT under 55 when leaving the Forces. This is known as the 18/40 EDP Point. And on the AFPS 15, the criteria are that they need to have served at least 20 years and be 40 or over BUT under 60 when leaving the Forces. This is known as the 20/40 EDP point.

Both of these factors need to be reached in order to be eligible.

Links:

Timecodes:

0:00 Intro
0:17 Basic EDP guidelines
0:47 What are the EDP eligibility criteria?
1:25 What does the EDP offer?
1:43 How is the EDP calculated?
2:51 Extra EDP information
3:33 How to claim the EDP?
3:40 When will I be paid the EDP?
3:47 EDP inverse commutation
4:23 EDP and re-joining the Armed Forces
5:26 EDP Example
9:58 Comparison between 12 years and 24 years service
10:31 Final thoughts
10:50 Outro

Sources:

AFPS 15

DISCLAIMER:
I am not a professional financial advisor and this video is not financial advice. Please do your own research before making any decisions with your money and seek professional financial advice if need be.

[thesavvysquaddie]

Timecodes:

0:00 Intro
0:17 Basic EDP guidelines
0:47 What are the EDP eligibility criteria?
1:25 What does the EDP offer?
1:43 How is the EDP calculated?
2:51 Extra EDP information
3:33 How to claim the EDP?
3:40 When will I be paid the EDP?
3:47 EDP inverse commutation
4:23 EDP and re-joining the Armed Forces
5:26 EDP Example
9:58 Comparison between 12 years and 24 years service
10:31 Final thoughts
10:50 Outro

[Sammy-lwns]

Great video. The information we get at work is so vague, they should show people this.

I'm at 12 years and currently weighing up if another 8 years to become eligible fof the EDP is worth is 🤔, its certainly a great benefit.

[nathan]

So in (dumbed down lol) layman's terms of I do my full career I'll get either a lump sum or monthly payments up until I receive my pension?

[munch]

Why does my EDP show zero on my pension statement joined in 06 so was on the 05 and now 15 scheme still serving??

[waz]

I’m coming to the end of my career in the military of almost 28 years and I’m choosing to stay on the 75 AFPS with 9 years infantry and 18 years MPGS service leaving at 55 years old in November 23

[TamzinSpencer]

Hey mate, thanks for another great video. Would you be able to do a video on extra money you get when you're away on operations, tours etc.

[phillipsharples]

Another point - i've been informed by the pension society that if you take your AFPS pension at 55 you get you're EDP also until it lapses.

[urbancontent]

Just to confirm…

If you’re at your 18yr point and aged 40 can you leave with a lump sum and immediate pension? As in exit at 18 years instead of 22.

[petermahoney]

This is great info, coming to the end of a 24 years career on 75/15, makes interesting viewing. Thank you

[waynegray]

Good video bro but I am leaving at 12 yrs, I will take my chances on civi Street. The army is not what it is use to be and I don't think I can keep up with all the changes

[watson]

I could be wrong, but i think you have the reverse commutaion the wrong way around, its an afps05 option i believe, not 15.

[frostyfreeman]

Hi again..Sorry. I did 25 years first time around on the 75. When I finish in the MPGS I would of added about 17 and half years. This edp is really messing with my head. I am going to assume I have nothing to do with EDP<<<< Would this be correct??? Thank you

[minimad]

Just re-watching this and to do with the EDP payment. Am I right in assuming this does not increase each year in line with cpi during the period from leaving and up to your 55th birthday year but only increases in line with CPI from age 55 until State pension age? or does it take into consideration the CPI for the years leading up to age 55?

[ryanredmond]

Say u do 22 years and leave at 44-45 years old is it possible to transfer to reverses or not ?

[Jasonnuneaton]

Can anyone help me on this please, I served 8 years in the army and my pension as matured 0ver 24 years, does anyone know roughly how much I will get.

Thankyou

[decourtney]

Can you sign off just after your 17 year point and still qualify for EDP as you still would have done 18 years sign off?

[luke-wd]

Hi mate, please forgive me if I missed this in the video. I joined at 16 but with service technically starting at 18 my EED is the day before my 40th birthday.

Am I right in saying that I wouldn't be eligible for EDP? Seems sneaky after finishing 22 years and still not getting it!

[ritchie]

Hi mate, sorry I’m getting conflicting information from various sources. If a person joins the army in 2023 and leaves the in 2045. Let’s say the Person is over 40 when they depart. Are they getting a lump sum and a monthly pension from the day they leave?

[meenalimbu]

Bro another great video. What is your opinion about criminally low army pension that you get at state pension age. Me as a new police can retire with full pension at age 60. My spa is 68 yikes 😬

[matty]

I’m going to be on the 75/15 so it’ll be interesting to see what the new calculator shows.