Media playback is unsupported on your device Media caption David Cameron met troops and tried using some of their equipment during his visit to Afghanistan, as Carole Walker reports

A permanent memorial to British service personnel who died in Afghanistan is to be built at the National Memorial Arboretum in Staffordshire.

Prime Minister David Cameron made the announcement as he visited UK troops in Camp Bastion on Armed Forces Day.

The memorial will be paid for from fines imposed on banks that rigged inter-bank interest rates, he said.

Hundreds of celebrations are planned across the UK to celebrate the fifth national Armed Forces Day.

The day started with a volley of gun blasts at Nottingham Castle.

Armed Forces Day recognises the contribution made by service personnel past and present. Members of all three services take part.

Speaking from Britain's main base in Afghanistan, Mr Cameron said: "I think Armed Forces Day is an opportunity for the whole nation to say a very big thank you, but also to say how proud we are of our armed forces and everything they do for us.

Memorial transported

"I can announce today we will be taking more money off the Libor fines and putting it into the military charities - including building a permanent memorial at the Staffordshire arboretum, so that we can always remember, and future generations can remember, those that fell and died here in Afghanistan."

The prime minister later flew to the capital of Pakistan, Islamabad, for talks with President Asif Ali Zardari.

The number of UK service personnel to have died since operations in Afghanistan began in 2001 is 444.

The existing memorial in Camp Bastion, which Mr Cameron visited during his time at the base, will be dismantled as troops leave next year and as much of it as possible will be used in the arboretum.

The memorial, which will receive funding of £300,000, will be built over the next 18 months and dedicated once combat operations in Afghanistan have ended.

The National Memorial Arboretum, near Lichfield, hosts more than 250 different memorials, including a number to the armed forces.

Image caption During his visit, the prime minister was shown a remote controlled IED detection device. Image caption Maj Jim Skelton showed Mr Cameron a map of the area where British troops still remain in Helmand Province. Image caption The troops also explained how remote-controlled surveillance aircraft are used. Image caption The prime minister sat down to eat breakfast with the troops at Camp Bastion. previous slide next slide

Mr Cameron also announced how an additional £2.5m from fines levied on banks for attempting to manipulate the Libor interest rate would be spent on helping the armed forces community.

The Warrior Programme for Veterans and Families will receive just over £930,000 to further their efforts to support veterans moving into civilian life. The Veterans Council Headquarters will get £500,000 to create a one-stop shop for the military community to access mental health, health and social care services. Veterans Aid has been awarded £160,000 to expand its substance abuse and mental health treatment programmes.

Armed Forces Day: The highlights 10:47 A Feu de joie (gun salute) from Nottingham Castle opened the day, followed by a parade through the city and a fly-past by the Red Arrows 11:00 A Typhoon fly-past took place across the city centre 13:00 The Royal Air Force Falcons Parachute Display team made a landing on the Victoria Embankment 13.50 The RAF Battle of Britain Memorial flights featuring a Dakota, Lancaster, Spitfire and Hurricane begins at the Embankment 17:40 The King's Troop Royal Horse Artillery perform a Musical Drive on the Embankment

During his visit Mr Cameron ate breakfast with British troops and was briefed about recent operations in Helmand, using a tactical map laid out in a sandpit.

He also took the controls of a bomb disposal robot, steering a Wheelbarrow robot using a remote control, and mimicked the action of launching a Desert Hawk 3 drone as he held the unmanned aerial vehicle.

Asked about efforts by the US to start talking to the Taliban, the prime minister said it was important to pursue a political solution - as well as a security solution - in Afghanistan.

At a joint press conference with Afghan leader Hamid Karzai later Mr Cameron said the two nations had a "shared commitment to a strong partnership beyond 2014".

The prime minister said the British contribution in Afghanistan after 2014 would be an officer training academy. Combat troops, he said, would continue to leave the country, with none by the end of 2014.

Mr Cameron then flew on to Pakistan, but spoke of the relationship between the neighbouring countries while still in Afghanistan: "We have a very clear view which is that it's in Pakistan's short, medium and long-term interest to have a secure, stable and prosperous Afghanistan with which they have a good and strong relationship."

Media playback is unsupported on your device Media caption Red Arrows perform over Nottingham

Parachute display

In the UK, this year's main Armed Forces Day event kicked off with a tri-service parade from Nottingham's castle to the Old Market Square, where a drumhead service will be attended by the Duke and Duchess of Gloucester.

The Red Arrows, the Royal Air Force Aerobatic Team, will fly over and, at the service's conclusion, current and historic craft from the Royal Navy and Royal Air Force will also fly past - including the RAF's latest multi-role fast jet, the Typhoon.

There will be Royal Navy and Royal Marines displays on the River Trent, and members of the RAF Falcons Parachute Display Team will land on Victoria Embankment.

The King's Troop Royal Horse Artillery will close the day in Nottingham.

Meanwhile, Labour leader Ed Miliband said the party would give military veterans guaranteed "special provision" in the health service and change the NHS constitution to enshrine those rights.

He tweeted: "Armed Forces Day is a day when we rightly commemorate the sacrifices, past & present, that our servicemen & women make to protect us."