Service personnel and their families can experience difficulty in accessing commercial products and services, such as finance and loans, due to their mobility and time spent outside the UK. To address this, the Ministry of Defence (MOD) has worked with the UK financial sector to improve the ability of armed forces personnel to access financial products.

Help accessing credit

The representative bodies for the financial sector are raising awareness within their membership of how to avoid disadvantage for service personnel and their families. They have worked with MOD to develop a useful guide: Financial Top Tips for Service personnel (, with information on credit rating maximisation, mortgages and loans, BFPO addresses and many types of insurance.

Loans for Armed Forces personnel

The MOD has made it possible for 3 of the UK’s leading credit unions to join forces, Joining Forces Credit Union, and make simple savings accounts and loans available to the Armed Forces members and their families.

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Car Finance: PCP

Our evidence suggests Service personnel sometimes experience issues with Personal Contract Purchase (PCP) car finance agreements, particularly if assigned overseas.

PCP’s are popular as they are an easy way to access a new car at reasonable cost, however they are legally binding and difficult to terminate in certain circumstances. Always consider the impact of early termination and how it may affect you, and always read the small print.

Here we share some useful information to help you make an informed choice.

What is PCP?

PCP is similar to hire purchase, in that you pay an initial deposit followed by monthly instalments. However, with PCP you do not automatically own the car at the end of the term. When the term ends, you are given a choice:

  • Make a final and lump sum payment to purchase the vehicle and own it outright.
  • If the car has maintained value, use the equity as a deposit on a new vehicle via a new PCP contract.
  • Hand the car back and walk away, no further payments, no money due.

Terminating a PCP: your legal rights

UK law provides you with the right to voluntarily terminate a PCP agreement. The law serves to protect consumers who no longer require the car or are unable to afford the repayments, following a change in circumstances. It also protects the finance company, ensuring borrowers cannot easily back out of their contract obligations; it does this by setting a minimum repayment amount of 50% of the total amount payable.

Voluntary Termination of PCP

Voluntary termination of a PCP is the legal right of a purchaser to cancel the finance agreement early in certain circumstances. Often car dealerships do not promote this option or explain it well.

The right to voluntary termination is particularly useful for Service personnel, for instance if assigned overseas. Depending on the circumstances, voluntary termination may be possible, with nothing more to pay and