He was the fifth son of Algernon Percy, 1st Earl of Beverley and Isabella Susanna, and a grandson of Hugh Percy, 1st Duke of Northumberland. Educated at Eton, Percy purchased a Lieutenant's commission in the 7th Regiment of Foot in 1804. He took part in the Peninsular War as Aide de Camp (ADC) to Lieutenant General Sir John Moore from 1808 to 1809. He transferred to the 14th Dragoons as a Captain and was brevetted Major in 1810. He was captured in 1812 during the retreat from Burgos, and spent two years as a prisoner in France. Following Napoleon's exile to Elba in 1815, he was released.