Veterans are being told that they have to pay thousands back to the Ministry of Defence after a disastrous pension error occurred, estimated to be worth around £5.1 million. Despite the pensioners not being at fault for the mistake, Treasury rules state that all overpayments must be collected. That means that the veterans are responsible for paying back the money, even though it is not their fault.

The Ministry of Defence said that the overpayments stemmed from mistakes in the Armed Forces’ two final-salary schemes. These schemes guaranteed incomes for life for about 432,000 retired troops. Pensions were overpaid for years due to the error, 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 evetrans have only received letters this year detailing the money they owe.

Campaigners have called for the overpayments to be written off, calling the incident an "incorrect application of national insurance modification rules".

The Forces Pension Society (FPS) said that 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".

One veteran, 68-year-old Michael Evans, said that he was informed that he owes £16,000 and is facing a monthly cut of £414 to make up for overpayments, reports The Telegraph.

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."

Meanwhile, 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."

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."