Veterans are being forced to repay hundreds of thousands of pounds after the Ministry of Defence made a disastrous error in pension payments. Pensioners have been told they owe thousands, with total overpayments estimated at around £5.1 million. Despite the mistake not being the veterans' fault, Treasury rules require all overpayments to be collected.
Overpayment details
The Ministry of Defence said the overpayments stemmed from mistakes in the Armed Forces’ two final-salary schemes, which guaranteed incomes for life for about 432,000 retired troops. Due to the error, pensions were overpaid for years, and in some cases veterans owe back more than £100,000.
The problem was first identified by the Ministry of Defence two years ago, but veterans only received letters this year detailing the money they owe.
Campaigners call for write-off
Campaigners have called for the overpayments to be written off, describing the incident as an "incorrect application of national insurance modification rules". The Forces Pension Society (FPS) said there are 398 cases linked to incorrect National Insurance modification rules. Maj Gen Neil Marshall, the FPS’s chief executive, described the issue as a "failure of leadership, oversight, process and quality assurance".
Veterans' stories
One veteran, 68-year-old Michael Evans, said he was informed that he owes £16,000 and is facing a monthly cut of £414 to make up for overpayments. He said: "I can’t put into words what it feels like when the dead arm of the state appears from this end of the telescope to be defending its contractors’ errors rather than supporting its veterans."
Another veteran, 71-year-old James Uncles, who served 35 years as an aircraft engineer in the Navy, owes £45,687 as a result of overpayments dating back to 2021. He was informed that his monthly pension payments would be cut by nearly a quarter, resulting in £1,000 less per month. Additionally, a further £750 is to be deducted monthly for five years to recover the funds. He told The Times: "Is it all going to be down to innocent veterans? This scheme is clearly flawed and has been for many years, and in its wake, it’s leaving hundreds and hundreds of people who are having to change their lives."
MoD response
The MoD says it plans to recover funds "in a sensitive and proportionate way". A spokesperson said: "Where payments have been made in genuine error, we have a responsibility to recover taxpayer funds and will always seek to do so in a sensitive and proportionate way, including through tailored repayment plans and one-to-one financial and welfare support from veterans services."
