The value of early financial planning in military service

When you’re starting out in the forces, focused on training, deployments and the day-to-day demands of military life, finances might not feel like a priority. But starting early can make a real difference to your transition to civilian life and what options you’ll have as a service leaver.

Michael Cook, who served over 36 years in the RAF Regiment and now volunteers as a director at London Mutual Credit Union, and Oliver Ardizzone, who served seven years in the Army and is now a London Mutual member and adult volunteer with army cadets, have both seen how getting started with finances early creates more options during resettlement and beyond.

Why putting money aside works so well when you’re serving

Here’s the thing about military pay – it comes in regularly, and you can set it up so money goes straight into savings before you even see it. No thinking required, no temptation to spend it on something else.

“It’s a structured way to save. You don’t see it therefore you don’t miss it,” explains Michael.

Even if you’re only putting away £50 a month, it adds up faster than you’d think. That money from your first few years can turn into thousands by the time you’re making bigger decisions about your life.

Oliver found this approach worked brilliantly even after he left the Army: “I saw that if I get a savings account my money will come straight out of my pension before going to my bank account which I like the idea of. I never see the money and it’s all done for me. Prior to that I wasn’t saving at all.”

Keep your credit file clean from day one

Having a good credit score makes a huge difference when you need to borrow money. Being in the forces helps because you’ve got regular pay and a permanent address, but you can easily mess it up with silly mistakes.

Things like unpaid parking tickets, council tax bills sent to old addresses, or credit card statements going to the wrong place can all end up as black marks on your credit file. County Court Judgements (CCJs) from unpaid bills can stick around for years and make getting a mortgage much harder.

If you do run into debt problems, think carefully before going for options like Individual Voluntary Arrangements (IVAs). They might seem like a quick fix, but they can hang over you for years and affect your ability to get credit later on.

When you eventually want a mortgage, car finance, or even just a decent mobile phone contract, lenders look at your credit score to decide what to offer you. A clean record means better deals and lower interest rates, which saves you serious money. You can check your credit score for free to see where you stand.

Getting clued up about buying a house

House prices go up whether you’re ready or not, so it’s worth having an idea of where you might want to buy and roughly how much that’s going to cost you. You don’t have to buy anything tomorrow, but knowing what you’re aiming for helps you work out what deposit you’ll need.

There are special schemes for forces personnel, like Forces Help to Buy, that can make things easier. Even if you’re years away from actually buying, understanding what’s available and what deposits are realistic in your target areas helps you set proper savings goals.  personnel.

Settlement costs for non-UK service personnel

If you’re not originally from the UK but want to make it your permanent home after service, the good news is that settlement is free for non-UK service personnel under government immigration policy for armed forces. However, you’ll still need to budget for any spouse or children you’re hoping to bring with you – these costs can add up to thousands of pounds.

You’re entitled to start the settlement process after six years’ service, but the application process can take months to complete. Don’t leave it until you’re approaching your discharge date – get the ball rolling early so you’re not dealing with paperwork stress during your transition period.

If you need to borrow money

Sometimes you need a loan – maybe for a car, or to sort out an emergency. If that happens while you’re serving, the way military pay works can actually help you manage the repayments.

“I had a loan through my bank and I was just paying too much interest. Through LMCU it just worked out cheaper,” shares Oliver.

Just like with savings, you can have loan payments come straight out of your pay. “One of the great things a credit union can offer an ex-service person is to mimic the way services operate and take savings money at source,” notes Michael.

Why starting early gives you more choices

Here’s the bottom line – if you start thinking about your finances early in your service, you’ll have more options when you eventually transition to civilian life. Whether you do four years or twenty, good financial habits stick with you.

Having some savings and a decent credit score means you’re not backed into a corner when making big life decisions during your resettlement period. You’ve got choices, and choices are good.

The MOD recognises that successful transition is crucial for service leavers, which is why there’s comprehensive resettlement support available through programmes like the Career Transition Partnership (CTP). The JSP 534 tri-service resettlement manual sets out all the support you’re entitled to. But the financial groundwork you lay early in your service gives you the best foundation to make the most of these opportunities.

It also helps to work with people who actually understand what military life is like. “The great thing about the credit union is that the staff are very hands-on. The staff know their customers,” says Michael. When your job involves deployments, postings, and all the other unique bits of forces life, it makes sense to bank with people who get it.