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Armed Forces Pay Reform

Volume 604: debated on Thursday 7 January 2016

I am today announcing the introduction of a new pay model for armed forces personnel which will provide a modern, simple and credible remuneration offer for our armed forces that attracts and retains motivated people to deliver our operational commitments.

The current pay system, introduced in 2001, was the first integrated “tri-service” pay system. While a major advance at the time, it is now seen as overly complex with significant shortcomings and inefficiencies, which have led to dissatisfaction among service personnel.

We therefore plan to reform core pay from 1 April 2016 for all armed forces regulars and reservists up to the rank of commodore, brigadier and air commodore, except specialists such as professional aviators and special forces on bespoke pay scales. The new pay model will be both simplified and fairer.

In introducing a new pay system it is important that we recognise and value the contribution of service personnel who work so hard to keep us safe both at home and abroad. This is not a cost-saving exercise, and there will be pay protection to ensure that no service personnel take a pay cut on transition to the new model. Pay reform is integral to work to modernise the overall offer to service personnel and will sit alongside initiatives such as forces Help to Buy, the tenancy deposit loan scheme, the introduction of flexible working options, and of employment support to service spouses.

Rank will continue to be the main determinant of pay and incremental progression will remain a key feature of the new system, though it will be rationalised for both officers and other ranks—up to warrant officer level.

For other ranks where we require a breadth of trades there will also be four pay supplements which will better differentiate pay across the trades, removing the illogical characteristics of the current system. It will substantially reduce the number of pay journeys from potentially 128 different journeys to just four, with an associated reduction in administrative overheads. Crucially for service personnel this will provide a pay system that will be easier to understand and allow individuals to more accurately predict their future pay.