In December 2021 the Ministry of Defence instructed the Armed Forces’ Pay Review Body to begin its review for the 2022/23 pay round. The AFPRB is expected to submit its report in May 2022. Only those earning less than £24,000 received a pay rise in 2021/22.
A separate review of pay, commissioned by the Ministry of Defence, is expected to be published by spring 2023.
This paper explains how pay is decided, the role of the AFPRB, recent pay increases, and what the review might entail.
How is armed forces pay decided?
Pay for members of the armed forces is decided by Ministry of Defence (MOD), based on the recommendations of the Armed Forces’ Pay Review Body (AFPRB). There are similar processes for the police, teachers, the senior civil service and the NHS, who have their own pay review bodies.
The AFPRB gives independent advice to the Government on pay, accommodation and food charges for the armed forces. The MOD is not obliged to accept these recommendations.
The basic principle is that pay should be broadly comparable with pay levels in civilian life. However, the AFPRB is obliged to consider the funds available to the MOD, the Government’s inflation target, and the need to recruit and retain suitably qualified people.
In his letter for 2022/23, the Defence Secretary asked the AFPRB to “consider affordability of the pay round against the wider offer to our people”.
About armed forces’ pay
The pay package for armed forces personnel consists of the following elements:
- Basic pay
- An additional payment called the X-factor
- Additional and/or specialist pay, taxable and non-taxable allowances.
The X-factor is a pensionable addition to basic pay that recognises the special conditions of service. It is currently set at 14.5%. The pay that an individual receives will depend on their personal circumstances and eligibility for specialist pay and allowances. The starting salary for service personnel is around £20,000 and all salary levels can be found in AFPRB annual reports.
The AFPRB also recommends charges for service accommodation and food.
When will the 2022/23 pay award be announced?
The AFPRB won’t report until May 2022 and the MOD may not make its decision immediately, meaning any pay award will likely be backdated to the start of the 2022 financial year. For 2021/22 the AFPRB submitted its report on 21 July and the award was not announced until October 2021.
The AFPRB said it is disappointed by repeated delays to the pay round, meaning pay rises were not implemented on 1 April and were instead bckdated. In its latest report, for 2021, the Body criticised the “significant” delays in receiving evidence from the MOD for the 2021/22 pay award.
This paper will be updated to reflect the pay award for 2022/23, when it has been made.
Recent pay awards
The Government imposed a two-year public sector pay freeze from 2011/12 to 2012/13, which meant only those earning less than £21,000 received an increase in base pay during that time.
From 2013/14 to 2017/18 public sector pay awards were capped at an average of 1%. The AFPRB recommended the same across all ranks in line with this.
The Government lifted the public sector pay cap for the 2018/19 pay round, payable from 1 April 2018. The AFPRB recommended a 2.9% increase in base pay. The Government accepted “the spirit of this recommendation,” with a 2.0% increase in pay (in September salaries, backdated to 1 April 2018) and a 0.9% non-consolidated one-off payment.
The AFRPB said it received negative feedback from service personnel about the Government’s decision, who felt the non-consolidated award “showed disrespect for the unique role that they perform.”
In its 2020 report, the AFRPB said that for 2018/19 more than half of service personnel, 56.2%, had no pay increase as a result of incremental pay progression.
2021/22 pay award
For 2021/22, following the Chancellor’s announcement of a public sector pay pause, only those earning less than £24,000 received a £250 increase. However, contrary to the AFPRB’s recommendation, the MOD included X-factor in the salary calculation.
X-factor is an additional payment on top of base pay and the AFPRB argued in its report that X-factor is an allowance. As such, excluding it from the calculations of who was eligible for the uplift would ensure consistency with other public services. The AFPRB also warned about the potentially negative message it might give:
In our view, Service personnel would be justified in feeling aggrieved if the lowest paid did not access the minimum payment being offered across all other public sector employees simply because of their X-Factor.
Are personnel happy with their pay?
The views of personnel on their pay are recorded in the annual Armed Forces’ Continuous Attitudes Survey (AFCAS). The 2021 survey shows:
- 45% of personnel said they are satisfied with their basic rate pay. This is a fourteen percentage point increase since 2018, when only 31% felt satisfied with pay.
- Nearly a half (46%) thought the pay and benefits they receive are fair for the work they do, although over a third (35%) disagreed.
Pay review due in 2023
The MOD is undertaking a “comprehensive review” of pay and reward. This was announced in the Defence in a Competitive Age Command Paper, published in March 2021.
The armed forces reward and incentivisation review will consider all aspects of the offer to service personnel. This includes not just the financial reward (pay and pensions) but also benefits such as housing, healthcare, childcare, family support and career flexibility. It will be led by an independently appointed chair and will have external commercial support.
The review is expected to publish a report by spring 2023.
The MOD set out the broad parameters of how it sees its future workforce in a booklet published alongside the Command Paper. Entitled “Our finest asset”, the booklet says personnel can expect to work with and alongside new cutting-edge technology, develop specialist skills fit for the digital age and have more opportunities for operational service overseas. The booklet also outlines the priorities of each service and the broad range of benefits available to service personnel.
The AFPRB has said it hopes the MOD will use the review as an opportunity to address long-standing issues to ensure terms and conditions of service are fit for future.
Separately, the AFPRB intends to review the level of X-factor payment in 2023. The level of X-factor is reviewed every five years, most recently in 2018.