Capita pension portal fiasco leaves 8,500 retirees waiting months for payments

The UK government has been forced into damage control mode after Capita's troubled takeover of the Civil Service Pension Scheme (CSPS) left thousands of retired civil servants waiting months for their legally owed pension payments.

The scale of the crisis

The problems began when Capita took over the £239 million contract to manage the CSPS in September 2025. Almost immediately, the company faced a massive backlog of 86,000 cases inherited from the previous provider, with "a significant proportion" already overdue.

According to the Public and Commercial Services (PCS) union, approximately 8,500 newly retired civil servants have been affected by the delays. Some individuals have waited more than nine months for money they are legally entitled to receive, with the union describing the situation as a "fiasco" that has caused widespread financial hardship.

The Cabinet Office and Capita have acknowledged "serious issues" affecting scheme members, including:

• Difficulty logging into the new CSPS web portal
• Incomplete pension details displayed online
• Long waits on customer service calls
• Delays to pension quotes and payments

Government intervention

In response to the escalating crisis, the Cabinet Office has taken several emergency measures:

Angela MacDonald appointed to lead recovery The government has tasked Angela MacDonald, deputy chief executive at HM Revenue & Customs, "to lead oversight of an urgent recovery plan." This appointment signals the seriousness of the situation and the need for experienced leadership to address the backlog.

150-strong surge team deployed Capita is bringing in "over 150 additional staff" to support clearing correspondence backlogs and speed up processing. This will bring the total workforce to more than 650 people working on the pension scheme.

Interim support measures promised Cabinet Office COO Catherine Little and Capita CEO Adolfo Hernandez have stated they are working with departments "to agree interim support measures" for those experiencing financial hardship. The government has promised swift responses for cases involving ill-health retirement and bereavement, with full service for bereavement cases expected to be restored by February 12.

The human cost

The impact on affected individuals has been severe. The PCS union reports that thousands of civil servants are facing hardship as pensions and lump sums fail to arrive on time. The situation is particularly acute for:

• Those dealing with bereavement
• Individuals with ill health
• Retirees experiencing financial hardship

The union has called for the government to ensure the Civil Service Pension Scheme is "properly resourced and preferably brought back in house," suggesting that outsourcing to Capita has proven problematic.

Context and background

This crisis comes against the backdrop of Capita's troubled recent history. In 2023, the company suffered a massive security breach affecting its management of multiple pension schemes, including the Universities Superannuation Scheme. The firm was subsequently fined £14 million after a 58-hour delay exposed 6.6 million records.

Despite these issues, Capita won the CSPS contract with promises of "enhanced system design and digital innovation." The company had initially downplayed problems with the new web portal, describing them as "teething problems" that were quickly fixed.

What happens next

Current civil servants have been advised to await details from their departments about how to access support. Former civil servants experiencing financial hardship who retired in the last year are advised to contact their former departments directly.

For those who left more than 12 months ago, or who are long-deferred members, pensioners, or dependants, the Cabinet Office and Capita statement advises raising hardship concerns directly with Capita.

The PCS union has warned that "it is clear that the backlog at Capita will take months to clear," suggesting that the crisis will continue to affect thousands of retired civil servants for the foreseeable future.

This situation raises serious questions about the government's outsourcing strategy and the ability of private contractors to manage critical public services effectively. As the recovery plan is implemented, all eyes will be on whether Capita can resolve the backlog and restore confidence in the management of civil service pensions.