Government Concedes Failure of Outsourced Civil Service Pension Scheme

Since December 2025 the Civil Service Pension Scheme (CSPS) has been administered by the private firm Capita. The Cabinet Office has now admitted that the outsourcing has caused “unacceptable” service levels, with some retirees waiting up to a year for pension payments. The delays have left pensioners unable to pay rent, forced to rely on food banks, and left an estimated 17,000 relatives of deceased claimants facing financial hardship.

The Guardian

Capita secured a £239 million contract from the Cabinet Office despite having previously lost contracts for Teachers’ Pensions and the Royal Mail statutory pension scheme because of similar backlogs. When Capita took over from Equiniti it inherited a backlog of roughly 90,000 cases. A Public Accounts Committee report urged the government to bring the scheme back in-house after Capita missed key hand-over milestones, and the Cabinet Office later confirmed that the scheme could be a “prime candidate for insourcing in the future.”

The Guardian

Cabinet Office minister Nick Thomas-Symonds told parliament the scheme may be insourced and that the government would apply “robust commercial levers, including withholding payments,” to hold Capita accountable. A Cabinet Office spokesperson said Capita “failed to meet their critical end-of-June deadline… delivering a service that is completely unacceptable to both members and taxpayers.” Capita’s spokesperson apologized for the distress, claimed the backlog was being tackled, and added that the firm now has “processes, automation and technology in place to work through the backlog.”

The Guardian

The Public and Commercial Services Union (PCS) highlighted the human cost. General secretary Fran Heathcote said, “Capita has missed deadline after deadline, yet civil servants and pension scheme members continue to pay the price for those failures.” Individual claimants described severe hardship: a 98-year-old whose son Nick Hitch said the application process took three months, and Sarah Colhill, a widowed mother of a disabled daughter, who has been forced to claim universal credit while awaiting an £86,000 death-in-service benefit. Widows Sally McEnhill and Christine Chalker remain months away from confirmation of their entitlements, with Chalker reporting repeated assurances of “data migration” delays followed by no acknowledgment of new forms.

The Guardian

• “It took three months just to establish what application forms CSPS [the civil service pension scheme] required and get the information to them in a form they would accept,” — Nick Hitch, son

The Guardian

• “Capita has missed deadline after deadline, yet civil servants and pension scheme members continue to pay the price for those failures,” — Fran Heathcote, PCS general secretary

The Guardian

• “Each time I called I was told delays were due to ‘data migration’,” — Christine Chalker

The Guardian

• “We now have the processes, automation and technology in place to work through the backlog.” — Capita spokesperson

The Guardian