Veterans told to repay armed forces pension overpayments

What has been reported

The story broke in the Telegraph on 25 July 2026 and was followed by the Times, the Daily Mail and This is Money. The reporting describes long running errors in armed forces pension calculations that went undetected for years, in some cases leaving pensions overstated for the whole of that period.

According to that reporting, the MOD first identified the problem in November 2024, but many of the people affected were not notified until 2026. The errors sit in two final salary schemes which between them pay a guaranteed retirement income to around 432,000 former service personnel. Officials estimate the total value of the overpayments at £5.1 million.

More than 1,000 veterans have been asked to repay, and some individual debts are reported to exceed £100,000. The counts differ between outlets, from "hundreds" to "about 1,000 retired personnel", so treat the scale as reported rather than settled.

What appears to have gone wrong

Campaigners and pension advisers attribute the largest group of cases to the incorrect application of National Insurance modification rules. Final salary pensions rise each year with inflation, and in the affected cases the inflation increase appears to have been applied twice in some years, quietly inflating the pension a little more each time.

The exact cause has not been established publicly, and it is not known whether it was human error or a technical fault. That matters, because it is the question underneath the argument about who should pay.

The Forces Pension Society describes a wider set of error types than the National Insurance one. Its chief executive, Major General Neil Marshall, told the Mail on Sunday that the demands arise from policy errors and miscalculations relating to pension sharing on divorce, early departure payments, guaranteed minimum payments, guaranteed income payments and National Insurance adjustments.

How the cases split

• 398 cases involving the National Insurance modification issue, which the Forces Pension Society is aware of directly.
• More than 1,000 additional cases which it estimates relate to other calculation mistakes, including divorce settlements and similar administrative problems.

What each side says

The MOD

The MOD maintains that it is legally required to recover excess public funds. A spokesperson said that where payments have been made in genuine error, the department has 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.

Equiniti, the payroll agent that administers the payments, said affected members would receive appropriate support throughout.

The Forces Pension Society

Fair treatment for members facing recovery demands is one of the Society's six key challenges for 2026. Marshall's argument is that recovery lands on people least able to absorb it: it happens in retirement, he says, when life plans have been made, standards of living are set, and members lack the wherewithal to earn the money to give back.

The Society accepts the principle of recovering public money. What it disputes is who should carry the cost. Its position is that the requirement to refund the public purse should lie with Veterans UK and Equiniti, not with members who acted in good faith. Marshall has separately described the episode as a failure of leadership, oversight, process and quality assurance.

The campaign

Campaigners are urging the Treasury to write off the £5.1 million, on the basis that veterans should not bear the consequences of mistakes they neither caused nor could reasonably have spotted. As things stand no write off has been agreed, so anyone with a demand should assume it is live and deal with it.

What to do if you have had a letter

The single most useful thing you can do is slow the process down and get the arithmetic in front of you. A recovery demand is a calculation, and calculations can be wrong, including the one that says you were overpaid.

• Ask for the detailed calculation in writing. You are entitled to see how the figure was reached and which years it covers.
• Write to the Pensions Team at DBS first, quoting any reference printed on the letter.
• Then use the Internal Dispute Resolution Procedure (IDRP) if you are not satisfied. DBS aims to respond within 60 working days.
• Escalate to MoneyHelper and then the Pensions Ombudsman if it is still unresolved. A DBS complaint has to have been made first.
• Talk about the repayment schedule separately from the debt. The MOD says recovery runs through tailored repayment plans, so the timetable can be discussed even where the amount is not in dispute.

This is not the McCloud under or overpayment line

It is worth separating two things that sound identical and are not. If you have had a Remediable Service Statement, it carries an under or overpayment figure. That is a recalculation: your remedy period benefits are being worked out on a different basis, the difference is netted off, interest is applied both ways, and it is a normal part of the McCloud remedy.

What this story is about is different. These are errors in pensions already in payment, discovered years later, where the member did nothing and the calculation was simply wrong. The two can land on the same person in the same year, which is part of why the correspondence has been so hard to follow.