Overpayments: case 4

Miss E received several letters and statements from her pension scheme stating that her yearly pension would be £10,464 at age 60.

Shortly afterwards she got another letter saying when her monthly payments would start and that they would be backdated three months.

She received an initial payment of £5,534 and payments of £1,396 in the following two months.

After this she got a letter from her scheme saying that they had “inadvertently doubled” her previous payments, which should have been £2,767 and £697 respectively.

The scheme apologised for the error and asked her to provide a cheque for the total overpayment of over £4,000.

Miss E complained to the scheme, which offered her repayment over a period of 36 months, together with £300 for any inconvenience or distress she had suffered.

Miss E told us that she had changed her position – paying for holidays and other goods with the overpayment – and that she should not have to repay the money.

She pointed out that the scheme had not told her what her monthly payments would be and she said she had not realised the mistake herself at the time as she was too occupied with serious family issues to deal with practical matters.

Miss E thought that the proposed monthly deductions (£115 from a monthly pension of £697 after tax) were unfair and that £300 was insufficient compensation.

We did not uphold the complaint. The test was whether any reasonable person in her position should have identified that they were receiving more than their entitlement.

Having been told several times of the yearly figure of approximately £10,000 she ought to have known that she was receiving more than she was entitled to. She had received double what she was due over the period in question.

We also found that the £300 the scheme trustees had already offered for any distress caused was sufficient, noting that the scheme had quickly tried to correct the mistake.