Capita Faces New Probe Over Handling of Civil Service Pension Scheme
The National Audit Office will investigate Capita's administration of the 1.7 million-member scheme, citing continued underperformance.
Capita is under fresh scrutiny from the government due to its ongoing issues with the civil service pension scheme (CSPS). The National Audit Office has announced a new review into Capita's handling of the 1.7 million-member scheme, expanding an earlier investigation initiated in June 2025.
The spending watchdog's review intensifies pressure on the outsourcing firm, which has acknowledged that its performance "remains below standards" despite efforts to improve. Capita stated that it is implementing further automation and strengthening governance, including enhanced management information, to improve operational output and member experience. The company has accepted that its performance has not met the expectations of scheme members or the government and that the remediation of the CSPS remains its top priority.
Capita took over administration of the CSPS from MyCSP in December, inheriting a backlog of over 86,000 cases. By early February, this backlog had increased to more than 120,000 cases. Reports from This Is Money and Money Mail highlighted significant delays, leaving pensioners and bereaved families waiting months to receive their pension payments.
In response to "unacceptable service levels," the government launched a recovery plan in February. This plan included an emergency interest-free loan scheme and the deployment of additional personnel from both the civil service and Capita to prioritize urgent cases. However, Capita failed to meet the end-of-June deadline for restoring service, leading the government to withhold £9.9 million in payments and consider bringing the contract back under government management.
The outsourcing group has previously indicated a potential profit hit of up to £40 million stemming from these issues. In late September, the civil service pension taskforce reported that while Capita claimed to have met its self-imposed September 1 target for case resolution, overall performance was still deemed "unacceptable." The taskforce noted that this did not represent full service recovery and continued to leave many members facing uncertainty.
This Is Money has documented several cases impacted by the backlog, including a former prison officer whose retirement plans were jeopardized, and a bereaved mother unable to settle her late daughter's financial affairs.