Pension Schemes

Judith Cummins Excerpts

Wednesday 22nd April 2026 Commons Chamber

[The Paymaster General and Minister for the Cabinet Office (Nick Thomas-Symonds)]

I wish to provide the House with an important update on key pension, contractual and commercial decisions.

The security and dignity of those who have dedicated their careers to our public services are not negotiable, and they deserve a pension service that is reliable, efficient and secure. For those principles to be more than just words, they need to be underpinned by rigorous accountability and a refusal to accept second best. We recognise that for our public servants, these services are the foundation of their financial security. When the standards they deserve are not upheld, the Government will not hesitate to act decisively to protect their interests. It is in that context that I want to give the first update to the House on the Royal Mail statutory pension scheme.

Following a failure to meet critical transition milestones and a lack of confidence in Capita’s ability to implement and transition to the new operating model in a timely fashion, I am announcing today that I have terminated the new Royal Mail statutory pension scheme contract with Capita. Capita had an 18-month planning window to prepare for the transition. It failed to deliver numerous milestones, including a failure to implement the required IT automation. The Cabinet Office repeatedly flagged delays in transition milestones and that IT automation, ultimately issuing formal correspondence to reaffirm the mandatory requirements. To ensure members are protected, we will ensure continuity of the existing contract, but let the message be clear: I will not and we will not tolerate delivery failure from contracted partners. Public services require high-quality delivery, and public money should not be used to fund performance that falls short of the standards we expect.

I also want to address problems in the administration of the civil service pension scheme. The transition process from the previous provider, MyCSP, was not satisfactory. We are investigating the respective liabilities for those failures as between Capita and MyCSP. Given the criticality of these services, the Cabinet Office permanent secretary and I discussed transition with the chief executive officer of Capita. We sought and were given explicit personal assurances that the transition would be handled with the utmost care and that any backlogs would be managed effectively. I am sorry to say that those assurances have not been met.

It is clear in any event that the delivery of the service to civil servants since the transfer on 1 December last year has fallen far short of the required standard. The delays that civil servants have faced in accessing their civil service pensions are unacceptable, especially in view of their many years of dedicated public service. That is why I established a specialist pensions recovery taskforce, led by the second permanent secretary at His Majesty’s Revenue and Customs, Angela MacDonald, to take strategic oversight of the scheme’s management. That intervention, which includes a circa 140-person Government surge team to bolster operational capacity, is delivering results, including helping Capita to clear 15,000 inherited unread emails. Telephony wait times that averaged more than 90 minutes earlier this year have been successfully brought down to an average of under two minutes.

The stories we have heard of members missing mortgage payments and falling into hardship are distressing and entirely unacceptable. No one should have to face such financial anxiety after a lifetime of dedicated public service. That is why I took immediate action to ensure that no member was left to face these challenges alone while these service issues are being resolved. To mitigate the impact on those most affected, we have already provided more than £7.2 million in interest-free transitional support loans to more than 1,300 members. We are proactively driving the uptake of those loans to ensure that no member in need of support is missed, and I encourage all hon. and right hon. Members to ask their eligible constituents to reach out to their civil service employers for these loans, so that we can provide the vital support they deserve.

I can tell the House that Capita was explicitly instructed in July 2025 to prepare for the volumes it is now seeing. It knew the scale of the challenge, but failed to deliver the IT automation and portal functionality required when the service went live. The result, I am afraid to say, is a backlog of around 24,000 outstanding pension quotations. There is also a backlog of more than 1,500 open MP complaints. That is totally unacceptable. I have instructed officials to speak to Capita about how we can ensure that MP correspondence is dealt with quickly and efficiently, noting the importance of the fact that Members across the House were speaking up for their constituents. These are not just numbers on a spreadsheet; they represent thousands of individuals who are unable to plan for their futures or retire with dignity.

Service delivery is about more than just speed; it is also about the absolute security of member data. The breach we saw on 30 March, which saw personal information compromised on the pension portal, represents a fundamental failure in data protection. To be clear with the House, I will not tolerate these lapses. The Cabinet Office has formally notified the Information Commissioner’s Office of this breach, and we have written formally to the chief executive officer of Capita to demand a full technical account of this failure and a guarantee that it will not happen again.

Across the civil service pension scheme, we have taken direct action on all commercial levers. We are withholding milestone payments where deliverables have not been met, and we reserve every right to take further formal action. The Cabinet Office has mandated a clear recovery target on service levels. Capita must clear all inherited arrears by the end of this month and restore service levels to standard, contractually required levels by the end of June this year. We will continue to use every commercial lever at our disposal to ensure that these standards are met.

The security and dignity of all those who have dedicated their careers to our civil service and the Royal Mail are not negotiable. They deserve a pension service that is reliable, efficient and secure. We will continue to use every lever at our disposal to ensure that those standards are met and that members receive the service they have earned. I commend this statement to the House.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

--- Later in debate ---

[Nick Thomas-Symonds]

My hon. Friend can rest assured that I have interrogated officials on the situation that I inherited. On the point about assurances and promises not being met, I think the House can say today that when assurances are not met, I take decisive action, including commercial action. My hon. Friend will have seen that with regard to the Royal Mail statutory pension scheme, but also in our withholding milestone payments from Capita. He talked about whether we are looking at insourcing more things. That clearly is the Government’s pledge, and our policy going forward. With regard to the Royal Mail statutory pension scheme, we will look at a range of options in both those categories to ensure that we get the very best possible service for those who deserve it and rely on it.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

[Charlie Maynard (Witney) (LD)]

I thank the Minister for his statement. We have learned today that this contract was awarded two and a half years ago. Capita had two and a half years to prepare for taking on the administration of the civil service scheme. As has been mentioned, the Public Accounts Committee warned in October that Capita was not ready, yet it took on the contract regardless on 1 December. Today we learned also that the Government have terminated another Capita contract, for the Royal Mail pension scheme.

My constituents would like answers to the following questions. How many people on the civil service pension scheme, as of now, have not received payments that they should have had? Why should taxpayers be paying for the surge in His Majesty’s Revenue and Customs staff? A hundred and forty staff have come in to sort this out. Surely Capita should be paying for its incompetence. What is the timeline for Capita to clear up all inherited arrears, and is it prioritising hardship and bereavement cases? With regard to the Royal Mail pension scheme, now that Capita has been terminated, what is the plan?