Thousands of retired civil servants continue to face late or missing pension payments as administrator Capita oversees a growing caseload.
The government outsourcing giant took over the civil service pension scheme in December 2025, taking an already considerable backlog of 86,000 cases to 120,000 by February 2026.
It admitted earlier this year that its handling of the 1.7 million-member scheme was “not good enough” amid scathing government scrutiny.
Capita’s contract to oversee the Royal Mail statutory pension scheme was terminated in April, with Cabinet Office minister Nick Thomas-Symonds saying that the group had “failed to deliver numerous milestones”.
In an update in July, he announced the launch of a Cabinet Office taskforce with over 140 staff to reunite civil servants with their pension pots.
An interest-free emergency loan was also introduced for those awaiting pension payments, worth up to £20,000 in the most severe cases. This is not compensation, and would be repaid through pension deductions.
This will not be funded with public money, Mr Thomas-Symonds added, pledging to recover “every single penny of these surge costs directly from Capita”.
The civil service pension scheme could also be a “prime candidate for insourcing in the future”, he added.
The government has also withheld £9.9 million in payments from Capita over its handling of the scheme.
Who is affected by the issue?
Many civil servants who are near retirement are affected, alongside those who have recently retired and widows of former civil servants.
An update from the Civil Service Pensioners’ Alliance (CSPA) in August showed that 17,014 members were still waiting for a retirement quote, and 13,047 bereavement cases for Capita to resolve.
Capita has also begun sharing regular updates on the number of cases in the backlog that are over 100 days old. Earlier this month, it revealed that there were 1,069 bereavement cases, 288 payments, and 308 death in service cases still in this category.
The Public and Commercial Services Union (PCS), which represents civil servants, said earlier this month that many civil servants are now delaying their retirements due to concerns about the handling of their pensions.
One of its members, Philippa, said that she notified MyCSP – which administered the scheme until December 2025 – of her intention to retire in September of that year. However, she says that “unanswered queries” and evidence that “retirees were not being paid,” forced her to withdraw her notification.
She said: “I cannot begin to articulate how anxious and stressed I am over this situation, not to mention how my plans to improve my financial and mental well-being have been scuppered”.
“I cannot live without an income, so I cannot retire and risk the anguish of mounting bills and debt.”
Another civil servant, Gill, who worked for the Department for Work and Pensions for over 40 years, says she has delayed her planned pension date of January 2027 after seeing “lots of members not receiving their pension or lump sum”.
She told the PCS: “This is very upsetting and has ruined my mental health”.
“I should be looking forward to retirement, not stressing about it”.
