Thousands STILL WAITING for Civil Service Pension payments as 'critical' deadline to resolve problems missed

MoneySavingExpert.com (MSE) founder Martin Lewis highlighted Capita pensions to the newly-announced Chancellor John Healey on social media as one of the "many outstanding consumer issues that need work". Capita is a giant services firm that currently holds 85 Government contracts and is one of the largest public and private pensions administrators in the UK.

We reported on ongoing failings by Capita to properly administer the Civil Service Pension scheme in February. In April, we then covered the plight of tens of thousands of retired teachers missing pension payments – an issue exacerbated by administrative problems at Capita.

Capita's failings have had a "devastating human cost"

Capita had promised in March to resolve Civil Service Pension payment delays by the end of June. But a Public Accounts Committee (PAC) meeting held on Wednesday 8 July revealed that it had failed to meet this deadline. This is after the firm had ALREADY failed to meet an earlier deadline of the end of April.

New Government figures published on 27 July reveal that, as of 20 July:

• Close to 10,000 people were still waiting for pension quotes – despite some 7,194 of these people having already now passed their scheduled retirement date due to the delays.

• The families and estates of nearly 5,000 civil servants who've passed away are still waiting for their pension payments.

During the committee meeting, MP for North Dorset Simon Hoare said Capita had "failed significantly" on basic customer service, such as answering phone calls and handling MP correspondence, adding that there had been a "devastating human cost" as a result.

Mr Hoare also questioned why the Government awarded Capita its contract in the first place. In response Andrew Forzani, government chief commercial officer at the Cabinet Office said it had received assurances that Capita would implement new systems to handle the administration, but that the Government should now reflect on whether "it could have done more to verify those claims".

Workers' unions Prospect and the Public and Commercial Services (PCS) Union have called on the Government to urgently end Capita's contract, with representatives from each union calling its administration "shambolic" and "abysmal".

An independent advisor is now overseeing Capita's progress

Following the committee meeting, Capita was required to provide the Government with a plan by 14 July on how it would return levels of service to normal. It has since done this and it has been confirmed that advisory firm Grant Thornton has been drafted in as an independent advisor to scrutinise and oversee its progress going forward.

Cat Little, chief operating officer of the Civil Service, confirmed that Capita has now committed to returning some levels of service to normal by 1 September, with more complex cases to be resolved by October, adding that the independent advisor would "stress-test their underlying tech systems and assumptions".

Interest is being applied to delayed payments and compensation is being offered on a case-by-case basis

Interest based on the Bank of England base rate plus 1% point is being applied to delayed pension payments. Compensation is also being paid on a case-by-case basis, according to the Cabinet Office.

However, if you're affected, the official advice remains to make a complaint via Capita's member portal, despite this being called out as "not working properly" in the PAC meeting by Committee chair, Sir Geoffrey Clifton-Brown. MP for Sheffield South East, Clive Betts, added during the session that people escalating issues via the portal saw their complaints "disappeared into a black hole".

Sir Clifton-Brown also asked for assurances that the overall complaints process wouldn't be subject to "lengthy internal delays" and highlighted that standard Pension Ombudsman awards of £2,000 may be insufficient for some cases.

How to complain if you've been hit by Capita delays

Despite the major problems highlighted with the complaints process, the Government insists that you should still:

• Firstly complain to Capita. You can do this via the contact form on its online members hub.

• If your complaint isn't resolved, you can escalate it via the 'Internal Dispute Resolution' (IDR). This is a two-stage process, where your complaint is first handled by a senior member of the Capita administration team, and then escalated to the Cabinet Office scheme manager if there's no resolution.

• If dispute resolution doesn't work or you've waited longer than eight weeks for a response, you can complain to the Pensions Ombudsman. The Pensions Ombudsman will investigate and will make a binding decision, which is final and enforceable in court. It will set out what needs to be done to put things right, including awarding financial compensation where necessary.

Loans of up to £20,000 are also being offered to those affected who've retired since 1 January 2025 or who have partially retired and are still working. To apply, you'll need to contact your former HR department. If you don't meet this criteria but need support, contact Capita.

You can also get help through The Charity for Civil Servants which is offering financial assistance, help with mental wellbeing and the opportunity to speak with a money adviser. You can apply via the charity's website, though be aware that it's currently receiving a large number of applications.

Civil Service Pensions will be administered by the Government in the long-run

In response to the Committee hearing, the Government described Capita's failure as "completely unacceptable" and confirmed plans to bring administration of the scheme back under its control.

A spokesperson for the Cabinet Office said: "Capita has failed to meet their critical end of June deadline, repeatedly missing recovery targets and delivering a service that is completely unacceptable to both members and taxpayers. This Government is now drawing a line in the sand.

"While we will continue to apply robust commercial levers, including withholding payments, to hold them firmly to account, we are looking beyond short-term fixes. We have set out our intention to advance the biggest wave of insourcing in a generation, and we are now actively shaping a long-term strategy to bring this pension scheme back in-house."

A spokesperson for Capita said: "We continue to work at pace to resolve the operational issues in collaboration with the Cabinet Office. Despite the progress made to date, we recognise the service has not been good enough, particularly for members waiting on bereavement, retirement, and quotation cases, and we are sorry for the distress and inconvenience experienced by those members."