Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, what steps he is taking to support individuals entitled but currently unable to receive their Civil Service Pension due to the backlog.

The Cabinet Office awarded the contract to administer the Civil Service Pension Scheme to Capita in November 2023 under the previous government.

The issues and delays facing a number of civil servants and pension scheme members in receiving their pension quotes are unacceptable. I want to reassure you that this Government has taken firm action to help put things right as soon as possible. We have agreed a clear recovery plan with Capita, which includes specific milestones and accountability targets for delivery. For priority cases, we have deployed additional resources and improved communication with affected colleagues, so that staff, both former and serving, receive the quality of service and support they deserve.

Existing Key Performance Indicators (KPIs) have been enhanced and strengthened to deliver improved performance and higher penalties for failure, including financial penalties. These have already applied in respect to Capita's performance falling short of expected standards and delays in administering the Civil Service Pension Scheme.

Capita were instructed to prioritise and clear the most urgent cases such as Death in Service and Ill-Health during February and March. While Capita previously assured us that performance standards for Death in Service and Ill-Health were being met by mid-March, recent information continues to demonstrate unacceptable delays in some ill-health retirement and death-in-service cases. We have urgently escalated this to Capita, who are actively investigating the underlying data and reasons for these continued delays.

Capita has made lump sum payments to 14,880 members, the majority of whom have retired but are not yet receiving their pension.

The Cabinet Office has mandated Capita that they must restore service levels by the end of June 2026. This includes ensuring benefits for members are calculated and paid completely and accurately and associated full correspondence for members is provided in a timely manner. We are using every commercial lever at our disposal, including withholding payments for deliverables that have not been met. We also reserve the right to take further formal action to ensure the service returns to the required standards.

It should be noted that once normal service resumes, there is a necessary administrative process that must be completed: members must first receive their pension quotes, formally accept them, and then be processed into the payroll system. Due to the time required for these sequential steps, the first actual payments are expected to commence around late August or September.

To provide immediate financial support to those who may need it, including those who have left under the compensation scheme, arrangements are in place for interest-free bridging loans of £5,000 and up to £20,000 in exceptional cases - to most recent retirees facing payment delays. This is alongside interim lump sum payments being made to provide immediate funds to retiring members. The pension scheme continues to make monthly pension payments to approximately 730,000 existing pensioner members on time.

Existing civil servants who have partially retired or a civil servant who retired from 1 January 2025, can contact their employer to access the transition support loan.

Pension scheme members not in the scope of this loan scheme, but who are at risk of experiencing financial hardship due to the delayed payment of their pension, should contact Capita and mention the financial impact of these delays. Capita will then prioritise resolution of these cases.

To mitigate member hardship, employers have issued £12 million in Transitional Support Loans to 2,236 members and these arrangements continue to be in place.

Interest will be paid on delayed benefits to avoid financial loss by members. In addition, the existing statutory complaints process evaluates claims for financial losses, as well as distress and inconvenience caused, on a case-by-case basis to determine whether compensation is due. This ensures that any retiree who provides evidence of extra costs, such as bank penalties or interest charges caused by the delay, is fairly assessed. This process is run in accordance with the standards set by the Pensions Ombudsman.

Regular updates on the work to recover the service, continue to be posted on the Civil Service Pensions member portal and on Gov.Uk.