Armed forces pay 2022/23

A new version of this paper, reflecting the armed forces pay award for 2023 announced on 13 July 2023, is available at: Armed forces pay 2023/24.

Introduction

Armed Forces personnel will receive a 3.75% increase (3.5% for senior officers) in base pay for financial year 2022/23.

Announcing the award on 19 July 2022, the Defence Secretary, Ben Wallace, described it as "the biggest percentage uplift in 20 years." In 2021/22, only those earning less than £24,000 received a pay increase.

In 2022, satisfaction with the rate of basic pay fell for the first time in four years.

The Ministry of Defence is reviewing pay as part of a wider review of personnel’s terms and conditions. The Haythornthwaite Review is expected to submit its report to the Government 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”.

Pay for senior military personnel is decided as part of the separate Senior Salaries Review Body (SSRB), which submits its own report to the Cabinet Office.

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, recruitment and retention payments (where applicable), and 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 starting salary for service personnel (after training) is £21,424 (2022/23) and all salary levels can be found in AFPRB annual reports.

The pay that an individual receives will depend on their personal circumstances and eligibility for specialist pay and allowances.

The AFPRB also recommends charges for service accommodation.

Criticism of delays to pay awards

The AFPRB has repeatedly criticised the MOD for failing to announce pay awards in time for the start of the financial year (1 April). It has said it hopes there will be a return to the usual timetable for 2023/24.

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.

In 2019/20 personnel received a 2.9% increase.

The Government also accepted in full the AFPRB’s recommended 2.0% increase in base rate of pay for 2020/21.

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.

2022/23 pay

The Government accepted the AFPRB's recommendation in full. This includes a 3.75% in base pay for personnel and a cap of 1% on accommodation charges.

Full details of the pay increases, including changes to allowances and recruitment and retention payments, can be found in the AFPRB’s 2022 report.

The separate Senior Salaries Review Body recommended an increase of 3.5% to base pay for senior officers (2 starts and above).

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 2022 survey, published in May 2022, shows:

• 40% of personnel were satisfied with the rate of basic pay. This is a drop of four percentage points from 2021 and ends a four-year rise in satisfaction levels from 31% in 2018. The highest level of satisfaction recorded between 2007 and 2022 was in 2010, when 52% of all personnel reported satisfaction with basic pay.
• The proportion of personnel who agree that the pay and benefits they receive are fair has fallen for the first time in four years, down from 46% in 2021 to 41% in 2022.

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.

Rick Haythornthwaite was appointed chair on 10 May 2022. The MOD says the review will be known as the Haythornthwaite Review of Armed Forces Incentivisation.

The review is expected to submit its report by spring 2023, with the Government's response in "due course".

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.