MOD says contract penalties have been applied over armed forces pension administration errors

What the MOD told Parliament

Jim Shannon, the DUP MP for Strangford, asked what the MOD is doing "to establish accountability for administrative errors resulting in Armed Forces Pension Scheme overpayments". Calvin Bailey, the Minister for Veterans and People, answered on 27 October 2026. The answer makes four points:

• The MOD has "governance, assurance and contractual arrangements to identify administrative errors, understand their causes and hold suppliers to account where appropriate", including performance monitoring, quality and assurance work, and investigation of failures.
• "Where contractual requirements are not met, appropriate remedies may be applied, including Key Performance Indicator Failure Charges and other contractual deductions."
• "Where contracts permit, contractual remedies have been applied in relation to Armed Forces pension administration."
• "Any further claims arising from pension administration errors are considered on a case-by-case basis, taking account of the circumstances of each case, including the extent of supplier responsibility and the steps taken to mitigate and recover any loss."

What has changed since September

The September answer came from Lord Coaker in the House of Lords. It said the MOD's contractual arrangements with Sopra Steria "include provisions relating to liabilities, insurance and risk management" and that investigations were ongoing "to establish root causes and whether any contractual obligations have been breached".

The October answer is the first we have found in which the MOD says remedies have been applied, rather than that an investigation will guide them.

What the answer does not say

• Which supplier. The administration contract has been with Sopra Steria since May 2020, and Equiniti Paymaster pays pensions as its subcontractor, with no direct contract with the MOD. The answer refers only to "suppliers".
• What the remedies were for. It says they were applied "in relation to Armed Forces pension administration", not that they were for the overpayment errors in particular.
• How much, or when. No amount, date or number of remedies is given.
• Anything for members. It says nothing about writing off debts, or about any money from suppliers going to veterans. The "further claims" it mentions are weighed against "the extent of supplier responsibility" and the steps taken "to mitigate and recover any loss", which reads as the MOD's own claims against suppliers, not a route for members.

It also sits alongside a different claim made in the Lords. On 2 September Lord Davies of Brixton, a Labour peer, said Defence Business Services has "no contractual way" to recover overpayments from Sopra Steria or Equiniti. The new answer does not say any overpaid pension has been recovered from a supplier. It talks about failure charges and deductions under the contract. Both statements can stand, and neither settles who should carry the cost of the debts.

If you have an overpayment letter

Your options are the same as before:

• Ask for the detailed calculation in writing before you agree to anything. A recovery demand is a calculation, and it can be wrong.
• Ask for a write off. Ministers confirmed in September that members may request an overpayment write off from the MOD under the Treasury's Managing Public Money guidance, and can defend against recovery on their personal circumstances.
• Use the Internal Dispute Resolution Procedure, then MoneyHelper and the Pensions Ombudsman if it is still unresolved. Our guide to overpayment complaints and compensation takes you through each stage.
• Agree the repayment schedule separately from the debt. The MOD says recovery runs through tailored repayment plans.

The story so far

The MOD first identified a problem with National Insurance abatement calculations in November 2024, and began correcting awards and notifying people in January 2026. Ministers told Parliament in September that 335 people were overpaid a total of £5.1 million through those errors. The Forces Pension Society and press reporting put the wider number being pursued, across several kinds of error, at more than 1,000. Our post on veterans told to repay armed forces pension overpayments has the full timeline.

The petition calling for the overpayments to be written off had 5,228 signatures on 28 October 2026, up from 5,166 on 14 October. It needs 10,000 for a government response and closes on 27 February 2027.