Big Changes Coming for Armed Forces Compensation: What You Need to Know

In an effort to better support those who serve in the UK's Armed Forces, the Ministry of Defence has announced updates to the Armed Forces and Reserve Forces (Compensation Scheme) Order 2025. Here's a breakdown of what this means for servicemen and women, veterans, and their families.

What's New?

Increased Compensation Payments: Starting from 7 April 2025, the Armed Forces Independence Payment (AFIP) will be increased. This payment is a vital financial lifeline for many, providing support to those who have been injured or made ill due to their service. The new rate will see a modest rise from £184.30 to £187.45 per week.

Enhanced Support for Mobility Needs: For those who use the Motability scheme, which helps disabled people in the UK lease a car, scooter, or powered wheelchair, the maximum weekly amount that can be allocated from AFIP will increase from £75.75 to £77.05. This change ensures that those in need of mobility support can continue to access the resources they need.

Why These Changes Matter

These updates are more than just numbers—they reflect the government’s ongoing commitment to supporting our armed forces community. By aligning the annual increase with inflation rates, specifically the Consumer Price Index (CPI) of 1.7% as of September 2024, the government ensures that these benefits maintain their value in real terms.

Policy Continuity

While these updates might seem like small adjustments, they are part of a longstanding policy to annually review and adjust military compensation in line with inflation. This steady approach helps provide financial stability and predictability for those who depend on these payments.

No Significant Overhaul

It's important to note that these changes do not constitute a major overhaul of the compensation scheme. Therefore, the Ministry of Defence did not conduct a public consultation, as the updates are primarily technical adjustments to existing policy rather than a shift in policy direction.

Monitoring and Future Reviews

The Ministry of Defence is committed to ongoing monitoring and review of these provisions to ensure they continue to meet the needs of the armed forces community efficiently.

In summary, while the changes might seem minor, they are part of a crucial framework that supports those who have sacrificed in service to the nation. By keeping compensation in line with inflation, the government aims to provide a stable and predictable source of support for our veterans and service members.