UK Civil Service Pension Latest News: The UK government has said Capita’s performance in managing the Civil Service Pension Scheme “remains unacceptable”, even though the company has met one of its latest recovery milestones for certain cases.
Sally Jameson, minister at the Cabinet Office, told the House of Commons that Capita had failed to restore the administration of the pension scheme to its contracted service levels by the end of June 2026. The company subsequently set two recovery milestones: clearing its workable stock by September 1 and processing cases within agreed key performance indicators (KPIs) from September 30.
Capita said it had met the September 1 milestone across five priority areas: bereavement, death in service, ill-health retirement, retirement payments and retirement quotations. However, the milestone covered only cases classified as “workable stock”.
Jameson said this did not amount to a full recovery of the service. “While this step is noted, meeting a milestone on workable stock alone is not sufficient progress and does not constitute full service recovery,” she said. She added, “Overall performance remains unacceptable, and far too many scheme members continue to face uncertainty while waiting for their cases to be resolved.”
UK Civil Service Pension Latest News: What Is The Pension Crisis?
The crisis relates to ongoing administrative problems in the Civil Service Pension Scheme, including a backlog of cases, delays in processing retirement-related matters and uncertainty for members waiting for their cases to be resolved.
The problem is not that the government has said it cannot pay Civil Service pensions. Instead, the concern is about the administration of pension services, including delayed retirement payments, pension quotations, bereavement cases, death-in-service cases and ill-health retirement cases. Capita’s failure to restore services to the required contractual levels by the end of June led to further recovery measures and government scrutiny.
UK Civil Service Pension Latest News: How Many Old Cases Remain?
Government recovery data shows that hundreds of cases that had been outstanding for more than 100 days remained unresolved. The figures included 1,069 bereavement cases, 308 death-in-service cases, 12 ill-health retirement cases and 288 payment cases. Some of these were classified as workable, while others required information or action from third parties before they could be progressed.
There has also been progress in dealing with retirement quotations. Capita had around 4,000 quotations outstanding at the end of June and committed to reducing the backlog. By the end of August, 3,087 quotations had been issued, leaving around 900 still outstanding. These figures explain why the government has continued to describe the overall service as not fully recovered despite Capita meeting its September 1 milestone.
UK Civil Service Pension Latest News: Why Is Capita Still Facing Criticism?
The key issue is the difference between completing a specific recovery milestone and restoring the entire pension administration service. Capita’s September 1 target focused on workable cases in five priority areas. However, cases that require additional information or involve more complicated circumstances can remain unresolved. The government has therefore said that meeting the workable-stock target alone does not demonstrate full service recovery. The government has also taken financial and oversight measures against Capita. It has withheld £9.9 million in contract payments linked to missed milestones and is recovering the cost of additional government support. Independent auditors and a remedial adviser have also been involved in examining the service and supporting the recovery process.
UK Civil Service Pension Latest News: Will The Scheme Be Brought Back In-House?
The government is considering a longer-term strategy that could involve bringing administration of the Civil Service Pension Scheme back in-house. In the meantime, ministers have said they will continue using contractual and commercial measures to hold Capita accountable while work on the longer-term strategy continues. The possibility of an in-house model reflects the government’s concern that the current problems require more than short-term reductions in the backlog.
UK Civil Service Pension Latest News: What Happens Next?
The next major recovery milestone is September 30, when Capita is expected to process cases within the agreed KPIs. The government is also awaiting the findings of a technical audit and a report from the remedial adviser. Jameson has said she will provide the House of Commons with a substantive update in October. For Civil Service Pension Scheme members, the key issues remain the clearance of outstanding cases, timely retirement payments and quotations, and access to accurate pension information. Therefore, while Capita has reported progress against its latest target, the government’s position is that a milestone covering workable cases does not mean the wider pension administration crisis has been resolved.
