A retired Ministry of Defence civil servant is facing severe financial hardship and the prospect of returning to full-time work after being ordered to repay £25,000 in pension overpayments caused by an administrative error that lasted for eleven years.
A Decade-Long Error Uncovered
Derek Ritchie, 63, whose real name has been withheld, was informed in March this year that his civil service pension payments had been miscalculated since 2014. The scheme administrators, in a letter, apologised for any inconvenience and demanded the repayment of the £25,000 sum, either as a lump sum or through instalments.
After requesting an explanation he says he never received, Ritchie was threatened with legal action three months later if he did not begin refunding the money. "Over the last 11 years, I’ve made decisions, expenditures and plans based on the figures I was given," Ritchie said. "The mistake will cause me considerable hardship. I shall have to go back to work for years to pay this off." The stress of the situation led to him being prescribed medication for depression and anxiety.
A Systemic Problem in Outsourced Administration
Ritchie's case is not isolated. He is one of hundreds of civil servants who have been told to return overpayments resulting from administrative mistakes, with some facing demands for six-figure sums. The pension scheme is managed by MyCSP on behalf of the Cabinet Office, which admitted in 2019 it was attempting to claw back £2.7 million from more than 2,000 pensioners.
These errors came to light during a major Cabinet Office-ordered review, though this review failed to identify Ritchie's overpayments. In his case, the annual overpayment escalated from around £200 to approximately £4,000. His monthly income has now been reduced by 13%, and MyCSP stated it would deduct a further 15% monthly if he agreed to a repayment plan.
Fran Heathcote, General Secretary of the Public and Commercial Services Union, criticised the setup: "Errors and overpayments have been a feature of outsourced pension administration. Civil service pension administration should be done by civil servants under direct ministerial control. When things go wrong, people suffer."
Legal Duty and Personal Hardship
Pension providers have a legal obligation to recover overpayments, even when recipients accepted them in good faith. However, the debt can be reduced if pensioners provide evidence that they have spent the money and that repayment would cause significant hardship.
For Ritchie, the incorrect pension valuation directly influenced his decision to take early retirement when his MoD role was made redundant in 2014. He has since worked part-time as a mental healthcare assistant and planned full retirement in 2027. "I might have chosen to continue my career within the ministry or opt for the redundancy deal... if I’d known my income would be lower," he reflected.
The Cabinet Office stated it sympathised with Ritchie but emphasised its duty to recover public money paid in error. A spokesperson said: "We apply stringent guidelines on the recovery of overpayments, and work to ensure any money is recovered with flexibility and the least burden possible."
This incident follows a critical October report by the Public Accounts Committee, which accused the Cabinet Office of mismanaging the outsourced pension scheme and blamed MyCSP for "unacceptable" service levels. The report also raised concerns as the £239 million management contract transferred from MyCSP to Capita, suggesting the service should be brought in-house.
Capita, which took over the scheme this week, said it brings decades of expertise and modern technology, including AI, to build a more intuitive service. Ritchie, however, remains in limbo, awaiting a full explanation and questioning the accuracy of the revised figures. "Government rules say a member should be placed in the position they would have been in had an overpayment error not occurred," he said. "Unless they are able to give me back the last 11 years... they’ve left me in a nightmare with no way out."
