Thousands of UK military veterans are being told they need to repay up to tens of thousands of pounds after an administration error meant their pensions were overpaid.
Members of all branches of the armed forces are entitled to an Armed Forces Pension Scheme (AFPS) payment in retirement without having to make contributions during their career, with the scheme funded by taxpayer cash.
Like other employees paid by the state – like civil servants and teachers – their pensions are defined benefit (DB), meaning that they don’t have an individual savings pot, but instead are entitled to a set income each year in retirement, depending on the length of their career and their salary.
But military pensions watchdog, the Forces Pension Society, says they are receiving countless enquiries from members who have received a letter from the AFPS administrator, Equiniti, telling them they have been overpaid and must give some money back.
In the letter, Equiniti says it has been told by the Ministry of Defence to “seek recovery” of overpayments that have recently been discovered – in some cases totalling tens of thousands of pounds.
Matthew Lowe, chief operating officer at the Forces Pension Society, told the i Paper that around 2,000 veterans have reported receiving such a letter, stating that their pensions have been overpaid, with some receiving incorrect payments for several years.
Now they are being asked to repay the money as a lump sum, over the same period as the error, or through negotiation with the debt management system if they have affordability issues.
Several reasons have caused these overpayments, including duplicated increases to veterans’ pension entitlements due to an administrative error.
‘A kick in the teeth for someone who served his country’
Richard Leaman, 70, from Devon, served in the Royal Navy for 35 years, operating in the Falklands, former Yugoslavia and the Middle East.
He retired in 2015 and received his army pension until February 2026, when he was told he had to repay £30,000 because of “errors in calculating national insurance”.
Richard said: “This will be seriously damaging to my retirement and a kick in the teeth for someone who served his country. My pension has been cut by 25 per cent now, and if I have to pay it back over the same period it was overpaid, it will mean a 50 per cent cut in my pension. This is life-changing stuff.”
He raised an internal dispute resolution form and sent it to Veterans UK – the UK Ministry of Defence’s official body providing support and services to veterans and was told they are “very busy at the moment and it may take a while to reply”.
Richard said: “This has caused me high stress and constant uncertainty. This is very bad for my mental wellbeing. If this goes on much longer, they can expect a compensation claim for that too. It’s a disgrace.”
Some retirees were also given bigger than expected “early departure payments”.
These are payments made to those in the armed forces who are 40 or over and have completed 20 years of service but have retired below the normal pension age – the age at which you would usually get your AFPS pension.
There is another separate issue affecting guaranteed minimum pensions, which are payments given to ex-military personnel who contracted out of the State Earnings-Related Pension Scheme (SERPs) – extra money you could get on top of your state pension if you reached state pension age before 2016.
Lowe said: “Treasury policy is that overpayment of public monies should be recovered. There is no contractual provision for recovering overpayments from Equiniti. So Equiniti is attempting to recover the money from veterans themselves.”
Not only are veterans facing demands for repayment as a result of payment errors being corrected, but many have now had their monthly payments reduced.
The Armed Forces Society is urging veterans who have received a letter to go back to Equiniti, check that the letter is genuine, and request further information to ensure the overpayment calculations are correct.
It also recommends that, like Richard, other veterans turn to the internal dispute resolution procedure.
However, Lowe said it is highly likely that most veterans who have been overpaid will have to repay.
“The defences in law are quite demanding because the burden of proof lies on the person who is alleging that the pension administrator has no good grounds for recovering the money.
“It is insufficient, for example, to say that a delay of 18 months in notifying you is grounds for voiding the recovery. You’ve also got to demonstrate that your lifestyle has been adjusted and that the monies are completely irrecoverable. So, under current policy, it is entirely likely that the majority of people who’ve been overpaid will have to repay,” he explained.
The pension watchdog is running a campaign calling for the repayment process to be halted until the issues that caused the overpayments in the first place are addressed.
Lowe said: “There are issues of who was responsible for the template calculation, and who was responsible in terms of oversight for checking that the actual calculations reflected the template calculations, so we’re calling on the government to look into this.”
Calvin Bailey, the minister for veterans and people, said an “inquiry was ongoing”.
A spokesperson for Equiniti said: “In its capacity as subcontractor to Sopra Steria Limited, EQ Retirement Solutions supports the recovery of overpayments from members of the Armed Forces Pension Scheme. We work to ensure that all members receive the correct information and appropriate support throughout.”
A spokesperson for the Ministry of Defence said it recognised that errors in pension payments may cause uncertainty for people, and that it was contacting all those affected and providing support to anyone who requires it.
It added: “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.”
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