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The Gurkha Pension Scheme

All Gurkhas who served in the Brigade of Gurkhas from 1 January 1948 up to 2007 were members of the Gurkha Pension Scheme (GPS).  Since the GPS was based on the Indian scheme it was well suited to the needs of Gurkhas who would retire back to Nepal.  In 2007 with the implementation of British TACOS for the Brigade of Gurkhas all Gurkhas now serve on normal British Army terms and conditions of service.

The British Government has maintained the view that Gurkhas have been fairly treated in respect of their pension provision and that the GPS is a very fair scheme.  For most Gurkha veterans the GPS provides a pension at least as good, and in many cases better, than that given to their British counterparts with identical periods of service.

The GPS was closed as a scheme in 2007, and all serving Gurkhas and those who retired after 1 July 1997 were given the option to transfer to the Armed Forces Pension Scheme (AFPS).  The 1 July 1997 date is significant because that is when Gurkhas ceased to be a Far East based force and became based in the UK.  

Under the GPS Gurkhas qualified for an immediate pension after 15 years’ service, typically in their early 30s; whereas most British personnel on the AFPS did not serve for the 22 years necessary to qualify for an immediate pension, and instead have a preserved pension payable at the age of 60, or age 65 for service after 2006.  

This means typically Gurkhas will have been receiving pension payments for over 25 years before most British soldiers of the same rank and length of service qualify for any payments under the AFPS.

As with any pension, the amount payable per month reflects the length of time over which the pension will be paid.  Although monthly sums paid under the AFPS will be higher, most Gurkhas will receive equivalent or better value than someone of the same rank and length of service in the AFPS, because the payments begin much earlier.  It is particularly worth noting that British personnel who retired before 1975, and who served less than 22 years, receive no pension whatsoever, in contrast to many Gurkhas.  

The estimated costs of equalising pensions, as proposed by lobby groups, would be £1.5 billion over 20 years and would benefit those with 22 years’ service or more, mainly retired Gurkha officers.  It would also have retrospective implications for all other public sector pension schemes.

Gurkha pensions, like basic pay, remain linked to that of the Indian Army and have special features to reflect the unique nature of Gurkha service.  In particular, the immediate payment of pensions on discharge in Nepal at the 15 year point and, in the event of the death of a Gurkha pensioner, the ability to transfer the pension not just to the surviving spouse and children, but to parents and dependant siblings.  This arrangement reflects local circumstances because, unlike the UK, Nepal does not have a sophisticated system of state benefits and support.

Two significant reviews in recent years have affected the level of pension provision.  A 1981 review led to Gurkha pensions awarded after 31 March 1979 being linked to the top band of pension rates provided for in the Indian Army pension regulations. 

It was also decided that the annual uprating of pensions should be linked to cost of living increases in Nepal, rather than the Indian Consumer Price Index.

More recently, an examination of Gurkha pensions in 1999 led to the introduction of a 100% welfare related cash uplift to British Gurkha pensions to take account of Indian Government benefits-in-kind, such as access to Indian military hospitals, available to Indian Army Gurkha pensioners.  

In addition, all pensioners discharged prior to April 1979 were also linked to the top band of pension rates provided for in the Indian Army. 

This resulted in substantially increased pension payments for around 27,000 British Gurkha pensioners, with effect from 1 April 2000. Effectively, this meant that Gurkha pensions were set at double the top rate of the Indian Army and now compare favourably to professional salaries in Nepal.