NHS Pension Overpayment and Underpayment Letters Explained

This guide is for people who draw an NHS pension, or a survivor's or children's pension, and have received a letter from NHS Pensions saying that they have been paid too much or too little. These letters are alarming, especially when the amount is large. Here is what NHSBSA says they mean, how it recovers money, how to repay or ask questions, and what you are owed if you were underpaid. It is about pensions. If your letter is from your trust's payroll about your pay, see our NHS overpayment recovery checker instead.

Why NHS Pensions sends these letters

NHSBSA's pensioner hub lists the reasons for an overpayment, and its knowledge base adds more. Almost all of them are changes that happen after a pension has started.

The Retirement Guide says NHS Pensions may need to write to tell you that your pension benefits have been changed. It gives two examples: your former employer notifies it of amended pay or membership details, or you have retired from the NHS again after a further period of membership. If your NHS pension benefits change, NHS Pensions pays you the new amounts.

If the letter says you were overpaid

• ✓ Read the letter for the amount, the reason and the date range. NHSBSA says the overpayment letter states the amount owed
• ✓ The money must be repaid. NHSBSA says that if a pension or retirement lump sum is overpaid for any reason, the money will have to be repaid
• ✓ The usual method is a reduction. NHSBSA says it may recover an overpayment by reducing future pension payments, and that it will contact you to tell you. If this is not possible, it contacts you or your personal representative with details
• ✓ If it was a payment after a death, NHSBSA asks the bank or building society to return it, and tells the next of kin or personal representative about the overpayment returned, any pension left and any other payment due. See what to do when an NHS pensioner dies
• ✓ Do not ignore it. If reducing your pension is not possible, NHSBSA says it contacts you or your personal representative with the details, and its repayment guidance refers to an invoice sent with the letter

You are entitled to understand the figure. NHSBSA says you can contact it to ask how the overpayment arose or how the amount was calculated, using the contact form on its pensioner hub or the overpayments team below. If your pension was recalculated, ask for the revised award and the calculation, and compare the dates with your own records of your service and pay.

How to repay, or ask questions

These routes come from NHSBSA's knowledge base articles on overpayments and repayments. The overpayments team's phone number is NHSBSA's, and it is not the same as the pensioner line on our contact page.

If the letter says you were underpaid

Underpayments get less attention than overpayments, but NHSBSA's published position is clear.

• Arrears are paid. The Retirement Guide says that if your pension has been underpaid, arrears will be paid to you to make up the shortfall. It describes this in the context of re-employment, where your pay for the year is compared with your earnings margin and your payment is adjusted, but the principle is the same for a revised award.
• Arrears on a new award run from your retirement date. NHSBSA says any arrears are payable from your chosen retirement date, and that your lump sum is due on the payable date of your pension benefits, although processing times can vary.
• Interest on late payments. NHSBSA says that if a pension or lump sum payment is not made within one month, an interest payment is due on the late payment, calculated on Bank of England base rates from the date it was due to the date it was paid. A lump sum is due on the day after retirement and a pension payment is due monthly in arrears. Interest is calculated automatically once the award goes into payment, NHSBSA writes to confirm the due date and the actual payment date, and it says there is no timescale for paying interest.
• A revised award can go either way. If a former employer amends pay or membership, the pension may rise or fall, and NHS Pensions pays the new amount from the date it applies.

Our payment dates guide sets out when a correction should reach your account. If an arrears payment arrives, read the next section.

Tax on arrears and on repayments

NHSBSA's pensions increase and P60 FAQ says payments must be taxed in the year they are paid, not the year they are due, so a large arrears payment can look over-taxed. NHS Pensions can, on request, provide a breakdown of what you should have received in previous tax years, by email or post, and if you send it to HMRC it will consider whether you were taxed correctly. gov.uk's guide to tax on pensions says the same: ask your provider for a written breakdown for each tax year, give it to HMRC and ask it to recalculate, and HMRC will refund any extra tax. See our guide to being taxed wrongly on NHS pension payments.

We could not find an NHSBSA page that sets out the tax treatment of repaying an overpayment of a pension that was taxed when it was paid, so we do not state one. If you are repaying a large sum, ask NHS Pensions whether the repayment is gross or net of the tax already deducted, and ask HMRC what that means for your tax.

Letters about the Guaranteed Minimum Pension

If you retired after 1978 and have a State Pension, you may get a letter about your Guaranteed Minimum Pension. NHSBSA says that when contracting out ended on 5 April 2016, HMRC stopped tracking contracted-out rights and sent schemes data to compare with their own records for 6 April 1978 to 5 April 2016. That GMP reconciliation is now complete, and where the data was wrong some pensions may have been overpaid or underpaid.

• Overpayments will be written off. NHSBSA says you do not need to repay them, and future payments will be corrected.
• Underpayments will be corrected. NHSBSA says it will arrange for any money owed to be paid.
• It will contact affected members directly. It gives no date. If you are contacted, check the information and ask for more details if you need them.

GMP also affects the yearly increase on your NHS pension: NHSBSA says that if you retired after 1978 and receive a State Pension, you may not receive the full increase on your NHS pension, with any shortfall offset by a proportional increase to your State Pension. See the April 2027 increase page.

NHSBSA's service assurance review

As of its page dated 1 October 2026, which first appeared on 2 September 2026, NHSBSA says a review of its pension administration found issues that may have affected pension benefit changes for some NHS Pension Scheme members. It adds that some processes did not fully follow scheme rules, including those for the Public Service Pension Scheme Remedy, also known as McCloud. It says most members are not affected, and that pension payments and core services continue as normal.

• ✓ NHSBSA says it will review member records to identify who has been affected, assess the impact on individual cases and contact affected members directly
• ✓ It says it will correct payments, backdate them and pay interest on any arrears due
• ✓ It says it expects to have contacted all affected members by the end of 2026, and will publish progress updates on its page every four weeks
• ✓ It says you do not need to take any action at this stage, and that if you are not contacted its current information indicates you are not affected
• ✓ The page refers to members and pension payments. It does not say pensioners in payment are specifically affected, so read any letter you receive for what it says about your own pension

Check the NHSBSA page itself for the latest update, as this is a live matter and the page is updated regularly. If you receive a letter that you think is connected, keep it and compare the dates and amounts with your advice of payment.

If you disagree with a letter