The fund - which will be distributed by the Office for Veterans’ Affairs (OVA) - aims to help both the physical and mental health needs of veterans.
It intends to award research grants to develop new surgery techniques and treatment options for amputees and blast victims.
The fund will also support therapy trials for those with post-traumatic stress disorder, and help restore patients’ function after brain injuries.
Mr Sunak said: ”We hugely value the sacrifices made by so many brave men and women in our Armed Forces.
“Supporting injured veterans and those with mental health needs is a crucial part of repaying the huge debt we all owe them.
“This new fund will help ensure veterans get the support they deserve with the very best ground-breaking research and treatments.”
But what have Armed Forces charities said in response to this new fund - and is enough being done?
How Armed Forces charities reacted to the £5m investment
Melanie Waters, Help for Heroes CEO, told NationalWorld there needs to be funding put in place to allow existing support to be able to continue.
She said although the charity welcomes the “recognition of the ongoing, complex needs of veterans”, and supports the investment in research for new treatments for traumatic physical and psychological conditions, there also “needs to be funding for the continuation of existing support and the reduction of NHS waiting times”.
She highlighted that the Government’s Veterans Mobility Fund closed earlier this year, which then passed the “financial burden” to charities, like Help for Heroes, to fund essential mobility aids that are not available on the NHS.
“We would like to see the Government ensure that the basic needs of veterans and embedded civilians who served under UK command, as well their families, are met,” added Ms Waters.
Fergus Williams, CEO of Walking With The Wounded, told NationalWorld the charity
“welcomes” the new fund and that “it is absolutely a step in the right direction to make a difference to the need to address poor mental health in the veteran community.”
Mr Williams said the NHS and Armed Forces charities have been “working at capacity” to address veterans’ needs, with the past 18-months being particularly tough on the third sector and public donations having dropped significantly.
He added: “Organisations like Walking With The Wounded, that are working on the frontline, need more financial support from the government to enable us to continue to deliver our life-saving support programmes to veterans across the UK.”