A Labour Party government report has exposed significant failures in the outsourcing of pension payments for retired UK civil servants, revealing that nearly 1.7 million members face potentially year-long waits for their pensions. The Cabinet Office has confirmed plans to bring the scheme management back in-house after Capita repeatedly failed to deliver acceptable service levels.
The decision to outsource the Civil Service pension scheme to Capita has caused serious delays, with some pensioners waiting up to a year for payments. Additionally, around 17,000 relatives of deceased claimants are enduring financial hardship due to these administrative delays.
In June, Capita’s CEO Adolfo Hernandez was questioned by MPs during a Commons committee hearing, where he apologized for the significant delays affecting pension administration. Thousands of civil servants remain stuck waiting for payments and retirement quotes from the struggling 1.7 million-member pension scheme.
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A Cabinet Office spokesperson stated: “Capita has failed to meet its critical end-of-June deadline, repeatedly missing recovery targets and providing a service that is completely unacceptable to both members and taxpayers. We are now drawing a line in the sand. While continuing to use robust commercial levers, including withholding payments, to hold Capita accountable, we are pursuing a long-term strategy to bring this pension scheme back in-house—a historic wave of insourcing.”
Fran Heathcote, General Secretary of the union representing civil servants, expressed frustration: “Capita has missed deadline after deadline, yet civil servants and pension scheme members continue to suffer the consequences. Each delayed case represents a person facing uncertainty, stress, and financial hardship.”
Capita acknowledged the ongoing challenges, with a spokesperson saying: “Despite progress, we recognize the service has not been good enough, particularly for members awaiting bereavement, retirement, and quotation cases. We sincerely apologize for the distress and inconvenience caused. We now have the processes, automation, and technology in place to address the backlog.”