Capita Faces New Government Probe Over Civil Service Pension Scheme Handling

Capita is under fresh scrutiny from the government, with the National Audit Office (NAO) launching a new review into the company's management of the Civil Service Pension Scheme (CSPS). This development expands upon an earlier investigation initiated in June 2025.

The NAO's review intensifies the pressure on the outsourcing firm, which has acknowledged that its performance on the CSPS contract "remains below standards," despite reporting "good operational progress." Capita stated that it is implementing further automation and strengthening governance, including improved management information, to enhance operational output and member experience.

Capita took over the administration of the CSPS from MyCSP in December, inheriting a backlog of over 86,000 cases. By early February, this backlog had grown to more than 120,000 cases. The company has faced significant criticism for the service meltdown, which has led to lengthy delays for pensioners and bereaved families in receiving their payments.

In response to "unacceptable service levels," the government introduced a recovery plan in February. This plan included an interest-free loan scheme for affected pensioners and the deployment of additional personnel, comprising 150 civil servants and 100 Capita staff, to expedite urgent cases. However, Capita failed to meet the June deadline for restoring the service.

As a consequence of these failures, the government withheld £9.9 million in payments from Capita and indicated the potential for bringing the contract back under government management. The outsourcing group previously flagged a potential profit hit of up to £40 million due to these issues.

Last month, the civil service pension taskforce reported that while Capita had met its self-imposed September 1 target for resolving cases, its overall performance was still deemed "unacceptable." Richard Vianello, director of the taskforce, noted that the performance "still leaves far too many scheme members facing uncertainty while they wait for their cases to be resolved."

Instances of hardship caused by the backlog have been highlighted, including that of former prison officer Jason Gould, whose retirement plans were jeopardized, and Teresa Cook, a bereaved mother unable to settle her late daughter's financial affairs. Capita has apologized for the pension scheme issues and stated that the remediation of CSPS remains the group's top priority.