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Civil Servants: Workplace Pensions

Answer

The Cabinet Office awarded the contract to administer the Civil Service Pension Scheme to Capita in November 2023 under the previous government.

The issues and delays facing a number of civil servants and pension scheme members in receiving their pension benefits are unacceptable. We want to reassure you that this Government has taken firm action to help put things right as soon as possible. We have agreed a clear recovery plan with Capita, which includes specific milestones and accountability targets for delivery. For priority cases, we have deployed additional resources and improved communication with affected colleagues, so that staff, both former and serving, receive the quality of service and support they deserve.

While Capita committed to a complete return to standard contractual service levels by the end of June 2026, they have failed to meet this critical milestone. The Government is taking robust action to hold Capita to account. This includes withholding £9.9 million in contract payments for undelivered milestones, alongside confirmation that the Government surge team costs will be recovered directly from Capita. To enforce strict compliance, independent auditors are being deployed to conduct a technical systems review, and an on-the-ground Remedial Adviser is being appointed at Capita’s expense. Further commercial, legal, and operational options remain on the table during the consideration of long-term structural delivery options.

Capita has issued lump sum payments to 19,362 retired members awaiting their regular pensions, whilst the scheme continues to pay approximately 730,000 existing pensioners on time. To alleviate immediate hardship, employers have issued £16.2 million in Transitional Support Loans to 2,932 members, alongside interest-free bridging loans, ranging from £5,000 to an increased cap of £20,000. Members will fully repay these bridging loans upon receipt of their formal pension payments.

Existing civil servants who have partially retired or a civil servant who retired from 1 January 2025, can contact their employer to access the transitional support loan. The provision of these loans will continue while delays persist.

Pension scheme members not in scope of this loan scheme but who are at risk of experiencing financial hardship due to the delayed payment of their pension, should contact Capita and highlight the financial impact of these delays. Capita will then prioritise resolution of these cases.

For compensation, there is also a statutory complaints process that evaluates claims for financial loss, distress, and inconvenience on a case-by-case basis and is operated in strict accordance with the standards set by the Pensions Ombudsman.

Secondary information

Type

Written question

Reference

16780

Session

2026-27

Subjects

Poverty Civil servants Finance Workplace pensions

Link

View this Written question on www.parliament.uk