Retired civil servants left without pensions as Capita delays payments

PCS has been contacted by distressed current and former members since Capita took over administration of the Civil Service pension scheme on 1 December, reporting significant delays to lump-sum payments and first pension instalments — often the sole source of income for newly retired staff.

The union has heard from people who:

• cannot pay mortgages, rent or household bills
• have incurred bank charges and late-payment fees
• are being forced to borrow money or rely on family support
• are experiencing severe stress and anxiety in retirement
• include bereaved spouses waiting months for survivor pensions

Capita inherited a backlog of around 90,000 unresolved cases from the previous contractor, MyCSP/Equiniti. PCS says pensioners are now paying the price, with some individuals waiting more than nine months for money they are legally entitled to receive.

In a letter to Civil Service Chief Operating Officer Cat Little, PCS general secretary Fran Heathcote warned that the problems now amount to “a fundamental failure to deliver the most basic function of the pension scheme — paying retirees their pensions in a consistent and timely manner”.

PCS also criticises the lack of transparency and urgency in the response so far, as it has received no reassurance about Capita’s resourcing levels or a credible timetable for clearing the backlog.

The union represents nearly 200,000 civil servants, most on low and middle incomes, has written to the Cabinet Office following ongoing meetings to demand urgent redress for affected pensioners and firm action to hold Capita to account for the proper delivery of the scheme.

PCS has demanded that Capita be directed to prioritise hardship cases, including unpaid retirees, people retiring imminently, ill-health retirement cases and bereavement cases.

PCS is also calling for a compensation scheme to cover:

• interest on overdue pension payments
• additional financial costs caused by delays, such as mortgage or loan penalties
• the distress and inconvenience suffered by pensioners

PCS general secretary Fran Heathcote says:

“This fiasco is extremely distressing for those who have worked and paid into their pension all their working lives. PCS demands redress for the serious financial peril that many have been put in. Given the failures of the last contractor, and the current situation with Capita, we have serious doubts about the private sector’s ability to administer the scheme.

“We believe that this work should be run by the civil service, under ministerial control, so that it can be properly resourced and pensions paid on time. And we call on the government to make good on its promise of ‘the biggest wave of insourcing of public services in a generation’.”