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Average Weekly Earnings (AWE) 2022

Category: News

Average Weekly Earnings (AWE) 2022 With effect from 1 April 2022, all members of the Armed Forces will be pensionable under AFPS 15 rules.

AFPS 75 pensions are worked out on the basis of Reckonable Service (RS) and published Pension Code tables.

AFPS 05 pensions are worked out on the basis of 1/70 of Final Pensionable Pay multiplied by RS.

AFPS 15 calculations are very different and the following explains how they work.

AFPS 15 pensions build up at a rate of 1/47th of pensionable pay for each year of service in the ’15 scheme. Whilst in Service, the pension already accrued is revalued each year by the Average Earnings factor. The Average Earnings figure is based on Average Weekly Earnings (AWE) figures. AWE is calculated using information based on the Monthly Wages and Salaries Survey, which samples around 9,000 employers in Great Britain. It provides estimates of monthly and annual change for the main industrial sectors and is used to increase (revalue) previous years of AFPS15 accruals. This sounds complicated so let’s give an example:

Sergeant X has been an AFPS 15 member since 1 April 2015. Their pensionable pay in 2015/16 is £37,300 rising by increments to £46,500 in 2020/21.

In 2015/16 pension earned = £793.62.

On 1 April 2017 this £793.62 increased by Average Earnings (2.6%) so becomes £814.25 and 1/47th of 2016/17’s pensionable pay is added (£837.87) giving a new total of £1,652.12.

On 1 April 2018 this £1,652.12 increased by Average Earnings (3%) so becomes £1,701.68 and 1/47th of 2017/18’s pensionable pay is added (£872.34) giving a new total of £2,574.02.

On 1 April 2019 this £2,574.02 increased by Average Earnings (2.8%) so becomes £2,646.09 and 1/47th of 2018/19’s pensionable pay is added (£916.92) giving a new total of £3,563.01.

On 1 April 2020 this £3,563.01 increased by Average Earnings (4%) so becomes £3,705.53 and 1/47th of 2019/20’s pensionable pay is added (£953.79) giving a new total of £4,659.32.

On 1 April 2021 this £4,659.32 increased by Average Earnings (2.4%) so becomes £4,771.14 and 1/47th of 2020/21’s pensionable pay is added (£989.36) giving a new total of £5,760.50.

This year’s increase, effective from April 2022, has recently been announced as being 4.1%. So, using the example above, Sgt X would increase the £5,760.50 accrued pension mentioned above by 4.1% and add 1/47th of their pensionable pay for 2021/22 to arrive at the April 2022 value of their AFPS 15 pension.

If you’re a member of the Forces Pension Society and have pension-related questions, contact us at [email protected]. If you’re not a member and would like to know more about us, visit www.forcespensionsociety.co.uk