Armed forces pensioners hit by delay

Members of the Armed Forces Pension Scheme (AFPS) have been underpaid by around £300 per year each.

Over 5,000 former service personnel who have retired since April 2010 have been affected by a mistake in calculations, the BBC reports.

The Service Personnel and Veterans Agency (SPVA) said the problem will be fixed in the autumn and affected pensioners will be reimbursed.

The majority of service personnel are part of the affected AFPS 75 scheme, which was open to new members from 1975 to 2005.

Members had the right to leave the service after 22 years or 16 years if they were officers.

They were allowed to take an early pension plus their tax free lump sum, and had the option of commuting part of their early pension to receive an even bigger lump sum.

Members would then receive a lower pension until they reached 55, after which their pension would be restored to the level it would have been at without the commutation.

However, from April 2010, the SPVA should have changed the way in which it calculated commutated pensions, but failed to do so.

This led to pensioners who commuted more into their lump sum never having their pension restored at 55.

The SPVA said it is updating its computer system to properly calculate commuted pensions.