Hogan Lovells

Key Dates

Determination issued 9 June 2017


A member had relied on incorrect reassurances that her pension benefits would not be affected by her receipt of state benefits and had spent the excess funds, in good faith, in such a way that she had irreversibly changed her position.


Mrs S was receiving Incapacity Benefit from state benefits. When these benefits were stopped in 2003, the administrator agreed to increase and backdate her NHS benefits which had been reduced to reflect the receipt of state benefits. When her state benefits were reinstated in 2005, Mrs S was informed the administrator but was informed in writing that her NHS benefits were unaffected. She claims she took out a car hire purchase agreement (HP agreement) in 2006, relying on these assurances.

When the NHS pension scheme administrator discovered it had overpaid Mrs S by £31,000, the scheme sought to recover approximately half the overpaid sum from Mrs S. Mrs S complained she had relied on the additional income in good faith and could not afford to repay it.



The Ombudsman upheld the complaint; Mrs S had relied on the overpayments in good faith and she irreversibly changed her financial position. It would be inequitable for the administrator to require her to repay money paid to her in error.


Both the defences of change of position and estoppel were satisfied. The Ombudsman was satisfied that she took out the HP agreement with the administrator's written assurances in mind and bank statements indicated she had spent the overpayment income on daily living expenses. It was likely she would not have incurred the same expenditure, had she not received the overpayments.


The Ombudsman directed the administrator to write off the overpayment and reimburse Mrs S any overpayments it had already recovered, with interest added. 

Date Accessed: 03/12/2021