Key facts
- The UK government is planning to bring the civil service pension scheme back in-house.
- Capita has failed to meet service standards for managing the pension scheme.
- Thousands of retired civil servants and their relatives have experienced significant payment delays.
- Some individuals have faced severe financial hardship due to these delays.
- The Cabinet Office cited Capita's failure to meet critical deadlines and recovery targets as reasons for the decision.
The UK government has admitted to failures in outsourcing the civil service pension scheme to Capita, leading to significant delays in payments for retired civil servants and their relatives. The Cabinet Office confirmed it is planning to bring the scheme back in-house following "unacceptable" service levels, which have caused financial and emotional hardship for thousands.
Multiple members of the scheme have reported being unable to afford rent and resorting to food banks due to the lack of income. The chaos has also affected an estimated 17,000 relatives of deceased claimants, who are facing delays in receiving their due payments. Among those struggling are a 98-year-old woman whose sons may need to financially support her and a young widow forced onto universal credit.
Capita was awarded a £239 million contract by the Cabinet Office, despite having previously lost contracts for managing Teachers' Pensions and the Royal Mail statutory pension scheme due to delays. A report by parliament's public accounts committee had advised bringing the scheme back in-house, noting that Capita had missed key milestones during the handover. The government conceded that Capita had repeatedly missed targets to improve its performance and failed to meet a critical end-of-June deadline for service standards.
The Public and Commercial Services Union stated that civil servants continue to bear the cost of these failures, with individuals facing uncertainty, stress, and financial worry. Capita acknowledged that the service has not been good enough, particularly for bereavement, retirement, and quotation cases, and apologized for the distress caused. The company stated it inherited a backlog of 90,000 cases from the previous administrator, Equiniti, and is working to resolve them with new processes and technology.