NHS pensions 'overpaid for years'

Mr Cable said he had been asked not to raise the matter until now

Hundreds of thousands of retired NHS and armed forces staff may have been overpaid for "decades" in their public sector pensions, MPs have been told.

Lib Dem spokesman Vince Cable said he had been told Xafinity Paymaster, which pays out public sector pensions, had been making "excessive" payments.

He said he hoped bailiffs would not be turning up at ex-soldiers' homes.

Chancellor Alistair Darling said people would not have to repay the money but adjustments would be needed from 2009.

A written statement from the Cabinet Office is expected to be published on Tuesday.

'Potentially enormous'

Mr Cable said he had been alerted to the problem 10 days ago by a journalist on BBC Radio Ulster.

He added she had "understood that this company had been paying out excessive public pensions to hundreds of thousands of public sector pensioners and that this error had just been discovered and the company were about to start retrieving the money from the pensioners".

After making inquiries he learned there had been a problem, but had been asked by the head of the civil service last Thursday not to publicise it for a few days to give the government time to notify pensioners.

During a debate on the Queen's Speech, he asked Mr Darling how many people were involved, how much money was involved and what steps would be taken to retrieve the overpayments, "which I understand in some cases go back decades and are potentially enormous".

Mr Cable added: "I hope none of us can face the possibility of large numbers of ex-servicemen suddenly being faced with bailiffs turning up and asking them to repay overpayments, as we've already discovered in the appalling incidences regarding tax credits."

Mr Darling intervened a few moments later, saying: "You were asking about repayments of money that has been overpaid.

"I'd think it'd be better I make it clear that isn't going to happen. It will be necessary to adjust what's paid for the future."

He added: "It does need to be put right from next year. There will be a statement tomorrow from the Cabinet Office."