Money And Finance

Keeping Financially Fit In The Forces

Forces life can bring added challenges when it comes to keeping on top of your money management but help is at hand with support from The Armed Forces Covenant.

The UK government initiative is a promise by the nation to ensure that those who serve or who have served, are treated fairly – and that includes the area of finances.

BFBS Radio broadcaster Tim Humphries looks at how the Armed Forces Covenant can help you and your family when it comes to financial wellbeing. He spoke to Captain Simon Joll of the Royal Navy, Head of Armed Forces Welfare Policy at the Ministry of Defence (MOD), who explained that service personnel are no different from any other citizens but there are added challenges due being deployed around the world. He said:

“We do try and support them – both at an individual unit level – people will provide advice.

"Then there are banks and credit unions that we have relationships with. And then there are also the charities and various other institutions.”

The Armed Forces Covenant aims to bring choice and freedom in your finances. From personal savings and pensions to car finance and credit unions, and even, stepping onto the housing ladder.

General Financial Advice

One organisation working with the Covenant is the ‘Money & Pensions Service’. Their mission is to help you easily access the information you need to make the most of your money and pensions. Vicky Copeland is Partnerships Manager. She said:

“Particularly for me it’s more about looking at the overarching initiatives run by the armed forces to support serving personnel, transitioning personnel, and others who are veterans to make the most of their money by providing information and advice services.”

Credit Unions   Whether it is planning a holiday, buying a car, getting on the property ladder, or splashing out on life’s little luxuries, chances are you will need savings or a loan.

That is where a credit union could come in handy.

LISTEN: Tim looks at how credit unions can help
Picture Credit: JumpStory

Credit Unions are "not for profit" financial cooperatives, owned by, and run for, their members, based on the idea of "people helping people". Not only are credit unions committed to giving you a really good return on savings, but your money is also safe. The government-backed Financial Services Compensation Scheme guarantees to repay deposits up to a maximum of £85,000 in the unlikely event of your Credit Union 'going bust'.

As part of the Armed Forces Covenant, the Ministry Of Defence is supporting three of the UK's leading credit unions to make saving simple and loans more affordable to service personnel and veterans. Although not advocating their products, it is about bringing freedom of choice all under the banner ‘Joining Forces’. The aim is to make savings & loans for the Armed Forces simple, with repayments straight from your Armed Forces pay.

One of those is 'Forces Finance', part of London Mutual Credit Union. Ben West is Head of Business Development and says they tailor their products to service personnel. He said:

“Those are based around an understanding of the specific challenges and issues and needs of the armed forces community.

"And being relatively small and owned by our members means that we can be really quick and really agile in responding to those needs.”

Each of the three ‘Joining Forces’ credit unions lead money management training to soldiers, sailors and airmen & women either virtually or, when it allows, face to face sessions.

'Serve & Protect' work directly with service personnel in training, to help bring financial freedom.

Another, 'First Defence Finance', is part of Plane Saver and CEO Valerie Walwyn Tate is a veteran and Army widow - bringing personal experience to her profession. She said:

“I tell a bit of my story … I do that coming from a place of I teach, I’m really interested in behavioural science, and I’m really interested in finance, how people behave with finance.”

You can find out more on the three credit unions backed by the Armed Forces Covenant at

Motor Finance

The Armed Forces Covenant can help you with advice and support when it comes to financial wellbeing. That includes advice when purchasing a brand new car. Chances are that, like 93% of the UK population, you will use finance to buy it.

LISTEN: Tim takes a look at the support available when buying a new car
Picture Credit: JumpStory

The Ministry of Defence works closely with the Finance & Leasing Association - the leading trade body for the UK motor finance sector - to ensure service families are treated fairly. Adrian Dally, Head of Motor Finance said:

“We are very keen to ensure that the obligation under the Covenant that service personnel, wherever they are are treated no differently to other consumers.”

When buying a car straight from the showroom there are four types of deals.   

  1. A simple repayment loan, where you borrow money to pay for the car and repay what you have borrowed - plus interest. With this type of loan, you will own the car from day one.
  2. Hire Purchase or HP - you are hiring the car until you have made your last payment, at which point you then own it. Because of this, the interest rate is usually lower, so the monthly payments are lower too.
  3. Personal contract purchase - PCP - you are only paying for how much the car’s value depreciates, not the whole cost, which brings the monthly payments down a lot. If you want to own the car after your last monthly installment, you pay a ‘balloon’ payment - an amount similar to what the car is then worth.
  4. Personal Contract Hire - Similar to PCP, but you will not be able to own the car and must hand it back when you have made your last payment. If you hand it back earlier than this, you will still have to make the remaining payments.

But being in the armed forces means that overseas postings are part and parcel of life. However, Adrian says this should not stop you from taking out one of these contracts.

“Do say upfront that you’re in the services and give an indication of a foreign posting.

"That triggers the right conversation to ensure you’re lined up with the right type of finance product that lasts the right length of time.”

The FLA work with the Covenant team on training dealership staff and raising awareness of the armed forces across the industry. If you have issues with motor finance, there is advice on the Armed Forces Covenant website.

LISTEN: Tim takes a look at pension advice
Picture Credit: Shutterstock / lovelyday12


The Armed Forces Covenant can help you consider what is best when it comes to what you may need in later life, with pension advice and support.

The MOD work with 'The Money and Pensions Service'. Although not recommending specific products, they offer advice through virtual training and – when it allows – in-person events to service personnel and veterans.

Victoria Copeland, Brand Partnerships Manager says you can start thinking about your pension pot from the day you first step into uniform, saying:

"Particularly if you’re a brand-new recruit and you’re just getting used to the idea of having a regular income and how enjoyable that is.

"That just about sums up why it’s important to think about your retirement income – because that’s what your pension is”

Victoria’s organisation brings together three financial guidance bodies: the Money Advice Service, The Pensions Advisory Service and Pension Wise.

Generally, there are two types of pensions: First, 'Defined Benefit', taking your salary and length of service into account. You may have to pay contributions to the scheme, but your employer will also pay contributions on your behalf. Second, Defined Contribution where you build your own pot of money. Yourself and your employer - if it is a workplace pension scheme - pay into it monthly and the money is invested.

And, if you are a veteran - having had a second career on civvy street - information is at hand as you approach pension age.

"This is why we have our pensions advisory service available to you because you can talk to them about those different pension pots [civilian & armed forces]  and what that means to you as you approach retirement age."

You can find out more from The Pensions Advisory Service through your forces career.

Forces Help To Buy Scheme

Do you have dreams of owning your own place one day? 

The Armed Forces Covenant’s, ‘Forces Help to Buy’ scheme is enabling service personnel and their families to get on the property ladder.

LISTEN: Tim speaks with a couple who are hoping to get on the property ladder
Picture Credit: MOD

For some, getting on the property ladder might seem like a huge ‘life goal’ but the Forces Help to Buy scheme could help you get a foothold. 

"Since April 2014, just over 22,000 service people have taken the Forces Help to Buy advance. I think it pretty well speaks for itself.”

The Armed Forces Covenant initiative is helping service personnel to get on or stay on the property ladder, by borrowing up to 50% of their annual salary - to a maximum of £25,000 - to purchase their first property. 

Forces Help To Buy is open to all regular personnel who have completed the pre-requisite length of service, have more than six months left in the forces at the time they apply and meet the right medical categories. The scheme runs until the end of December 2022.

LSgt Dan Green and family Credit LSgt Dan Green
Credit: LSgt Dan Green

Lance Sergeant Dan Green of 1st Battalion The Coldstream Guards is one of them. Together with his wife Becky and their children, they have lived in Service Family Accommodation in Windsor since 2014.

Keen to buy a property for some time, they have both saved money in ISAs and considered the government’s Help to Buy scheme. On first hearing of the MOD backed plan two years ago, at a battalion briefing, Dan successfully applied through the military’s JPA - Joint Personnel Administration.

LSgt Dan Green and family Credit LSgt Dan Green
Credit: LSgt Dan Green

Dan & Becky started the house buying process in September in 2020 and aim to get the keys to their own place – a new build in South Yorkshire - by March 2021.

"If you’re in the military, go for the Forces Help To Buy.

"Get yourself on that property ladder and go for a mortgage, because I’ve had nothing but help all the way.”

The couple is looking to the future, with hopes their move will benefit the whole family.

Search the Armed Forces Covenant website for full details on Forces Help To Buy as well as all of the financial support and advice in this radio series.