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Lorraine Beavers (Blackpool North and Fleetwood) (Lab)
I beg to move,
That this House has considered administration of the Civil Service Pension Scheme.
It is a pleasure to serve under your chairship, Ms Lewell. I am grateful to my colleagues for attending this morning’s debate. After reading many emails from constituents, it is clear that the issue before us today is not just an admin problem. It has caused real worry, stress and financial hardship to people who spent decades serving the public, trusting that their pension would be paid properly and on time. The scale of the problem is now very large and affects people across the country.
Since Capita took over running the scheme on 1 December 2025, the Public and Commercial Services Union has been flooded with complaints. Members report long delays, mixed messages and very poor service. This is happening while there is a large backlog of cases passed on from the previous provider, MyCSP. Thousands of people are now stuck waiting. The result is stress, uncertainty and real financial hardship, which is not acceptable. The seriousness of it has been accepted at the highest level. Last week Cat Little, permanent secretary at the Cabinet Office, wrote to civil servants to admit that the service being provided falls short of what members should expect.
Mr Gregory Campbell (East Londonderry) (DUP)
A couple of weeks ago at Prime Minister’s questions I raised the issue of a very young civil servant trying to access her pension as she has only months to live. It was an exceptionally difficult and heartrending story, but thankfully, because of the appearance of her case at Prime Minister’s questions, the issue was resolved shortly afterwards. The point that was made then and since is that it should not take raising something at Prime Minister’s questions to get issues resolved. We need to get Capita, His Majesty’s Revenue and Customs, and the Cabinet Office or whoever to sort the issues out as quickly as possible.
Lorraine Beavers
I agree with the hon. Gentleman. The seriousness of it has been accepted at the highest level. As I was saying, Cat Little, permanent secretary at the Cabinet Office, wrote to the civil servants to admit that the service falls short of what members should expect. That alone should worry us all. We have also seen reports that some former civil servants have been left without any pension income at all because payments have not been made since Capita took over.
Jim Dickson (Dartford) (Lab)
I thank my hon. Friend for securing this debate. We can see by the numbers here how serious it is. I have heard from a number of constituents, as she has, in the situation she describes. Heartbreakingly, one constituent, Collette Reeves, retired at the end of last year to care for her husband who has been diagnosed with dementia, and she is now struggling to pay her bills because of the delays. Despite repeated attempts to get answers, she has got nowhere in accessing her pension or getting support from the interim emergency fund. Does my hon. Friend agree with me that the performance of Capita since it took over falls woefully short of what we should expect and that it is crucial for our constituents to get clarity on how to access the interim fund as a matter of emergency?
Lorraine Beavers
I agree. Some retirees have had to borrow money just to pay bills because their expected pension payments or lump sums have not arrived, and no clear timescale has been given for when they will. This is not a one-off mistake; it is part of a longer pattern. The Public Accounts Committee has made it clear that successive Governments have failed for years to manage the outsourced contract properly.
Kim Johnson (Liverpool Riverside) (Lab)
I thank my hon. Friend for securing this very important debate. PCS members in my constituency were on strike for a long time last year because of the failures by MyCSP. Capita had the contract before and failed. Does my hon. Friend agree that those people who have been waiting and struggling need to be compensated as soon as possible?
Lorraine Beavers
I absolutely do agree with you.
The move to Capita was meant to modernise the system and improve services. Instead, it has exposed poor planning and weak control. Since the transfer, the scheme has struggled to work properly. There have been late pension payments, missing lump sums, lost records, broken systems and long delays in answering calls.
Richard Foord (Honiton and Sidmouth) (LD)
I was contacted by a constituent who is a former civil servant. They waited on the so-called helpline for over two hours on six occasions and were cut off continually. It is a contradiction in terms to call it a helpline. Does the hon. Member agree that that is completely unacceptable behaviour from Capita?
Emma Lewell (in the Chair)
Order. I remind Members that when they say “you”, they are referring to me. It is the same convention as in the Chamber.
Lorraine Beavers
I apologise, Ms Lewell.
The scheme cannot even say how many people are still waiting for their first pension payout. From what we are hearing, it is clearly thousands. Behind those failures are real people. I want to share some examples of constituents who have agreed that their cases may be raised.
John was a prison officer for 25 years. He has been receiving just a fraction of his pension for several months. He was left on hold for two hours in December, only to be told that there was nothing Capita could do about it. Robert emailed to tell me that while the loan system is seen as a lifeline by many, Capita seems to be completely unequipped to deal with it. He says that some of his former colleagues are even being directed to charities and Citizens Advice.
Edward Morello (West Dorset) (LD)
Like the hon. Lady, I have a litany of complaints from constituents about the service they have received, and she is doing a brilliant job of highlighting the real-world impact of these delays. I have a constituent who spent 36 years in the police service and is currently unable to pay his mortgage or household bills. Another constituent spent 28 years at the Ministry of Defence and has been forced to take out loans and borrow money from family members. Is this any way to treat people who have dedicated their lives and their careers to public service?
Lorraine Beavers
I totally agree; this is not any way to treat our civil servants.
Elaine has been waiting for a pension forecast since early December. She came to see me in January because she cannot plan her retirement at all. She does not know whether she can retire, when she can retire or what income she will have. Julie partly retired at the start of January after applying for her pension back in August. She has still not been paid. She waited five hours on the phone and was told that no timescale could be given. She and her family are worried about paying bills, growing debts and whether her pension will be backdated.
Paul retired from the Ministry of Defence last July, but seven months later he has not received any pension and is living off his savings, with no clear answers. Alison retired and sent in her paperwork in September. She was told that it would be done by December, only to be told later that there was no record of her case and she should write to a PO box address.
Paul retired after 30 years of service. His forms were sent in on time. He has received no lump sum, no pension and no timescale. Julie has worked for the Department for Work and Pensions for 26 years. She carefully planned partial retirement and sent her forms months in advance. Her retirement date is now close and yet she still has no pension forecast. Diane contacted my office about her husband, also a civil servant, who was diagnosed last year with a serious brain tumour. They have been waiting months for a pension forecast so that they can plan their future.
Daniel Francis (Bexleyheath and Crayford) (Lab)
I thank my hon. Friend for securing the debate. Like her, I have received a litany of complaints in recent weeks from constituents—including Antoni, Catherine, Christopher, Kevin, Mike and Robert—with similar heartbreaking stories. Does she agree that it is important we take urgent action to ensure that consistent and timely pension payments are made for all these scheme members in our constituencies?
Lorraine Beavers
I agree. Peter reached state pension age and gave plenty of notice, but heard nothing. After waiting three hours on the phone, he was told that nothing had been done. He retired in good faith, but the system let him down.
Such cases are not rare. PCS has heard from people who cannot pay their rent or mortgages, who have missed bill payments, who have been charged fees by banks, who are borrowing money or relying on family, and who are suffering serious stress. Some widows or widowers wait months for their late partner’s pension. This is a human crisis. PCS has said that up to 8,500 people may have retired without receiving their pension. For many, this pension is their only income and, when it does not arrive, the impact is immediate and severe. This is a failure on a huge scale.
I also want to mention retired prison officers such as my constituent John, whose cases have been raised by the POA. They have worked in tough and dangerous jobs, and many now face delayed pensions and missing lump sums. The POA is right to call for urgent action, clear timescales and fair compensation.
Tom Hayes (Bournemouth East) (Lab)
Public servants in Bournemouth East who gave decades of their lives are struggling after providing service to all of us. Probation officers, youth justice workers, prison staff and court clerks are struggling while Capita makes mistake after mistake. Does my hon. Friend agree that being good at winning public service contracts is not the same as being good at delivering them, and that we need accountability where people’s lives have been harmed?
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
The hon. Lady is making an excellent speech, and we are all grateful for the opportunity to raise these cases. I have been contacted by a constituent who left the civil service in 1992 and, more than 30 years later, has still not received the pension that she is owed, despite providing proof of service from HMRC and making repeated transfer requests. Despite the fact that the civil service later located her superannuation file, the scheme continued to insist that no record existed. Does the hon. Lady agree that such cases show that the failure is not just delay but deep-rooted maladministration within our state, and that the Government must commit to ensuring people are paid the pensions that they are legally entitled to?
Lorraine Beavers
I agree.
To deal with hardship, the Cabinet Office has announced interest-free loans of up to £10,000. That may help in the short term, but it is wrong that pensioners are being asked to borrow money that already belongs to them. That should never have been needed. What is more, those affected have been left in limbo and have no information about the operation of these loans. Given the mismanagement of the scheme, how can members have any confidence that Capita will know who is facing hardship and is therefore eligible for a loan?
PCS has made it clear that many of these cases should have been completed before the hand-over, but were not. The Cabinet Office has accepted that more retirements late last year, and more this year, have made the backlog worse. Without a clear and well-resourced recovery plan, normal service could take many months to return. That is why Capita must urgently prioritise the cases of retirees, as over the coming months many could remain without any income whatever. It must increase staffing capacity and, ultimately, devote every resource to clearing the backlog.
It is welcome that the Cabinet Office has now brought in about 150 civil servants, mainly from HMRC, to help fix the problem, but it raises a simple question: if so many civil servants are needed, why is the work not being done inside the civil service? Are the Government billing Capita for the work that those civil servants are having to do?
Dan Carden (Liverpool Walton) (Lab)
I congratulate my hon. Friend on securing this debate. We are told that a system of crisis payments has been put in place but I am still receiving correspondence from constituents, including this morning. They are terrified that they will not be able to pay their bills at the end of this month. My question is for the Minister at the Cabinet Office. What sanctions will be put in place to ensure that Capita acts, because my constituents are still being totally ignored?
Lorraine Beavers
This problem has a long history. Pensions administration used to be done in-house. In 2012, it was moved out as part of the wider push to outsource services. Over time, Government control was sold off and MyCSP came to an end in 2025. The new contract was awarded quietly, despite known pressures from rising retirements and major legal pension changes.
Those decisions need to be looked at closely. PCS has called for Capita to focus first on hardship cases, including unpaid retirees, people about to retire, ill-health cases and bereavement. It has also called for proper compensation schemes to cover interest, extra costs and distress. Those are fair and reasonable demands.
Capita and senior officials have apologised and promised recovery plans. Apologies matter but they are not enough. When people are left without income, through no fault of their own, action must follow. There must be clear responsibility, updates and deadlines. Hardship cases must come first and resources must match the size of the problem. People must be compensated for the harm caused.
I have five questions for the Government. First, will the Minister ensure immediate financial support and fair compensation for all those affected? Secondly, will she publish a clear recovery plan with proper oversight? Thirdly, will she ensure that Capita pauses voluntary exit schemes, increases staffing capacity and dedicates every available resource to clearing this huge backlog for retirees? Fourthly, will she review how this contract was handled, including whether the service should return in-house? Fifthly, will the Minister restate a simple promise: pensions earned through public service must be paid on time and with respect?
Before the general election, my party promised Britain the biggest wave of insourcing in a generation. This farce has exposed just how important that promise was and remains. I urge the Labour Government to make good on that promise. Civil servants give their working lives to this country in good faith. When that trust is broken, it is not just unfair to individuals, it is a failure of Government that this House must address.
Emma Lewell (in the Chair)
We will need to keep Back-Bench contributions to three minutes. I call Ann Davies.
Ann Davies (Caerfyrddin) (PC)
Diolch yn fawr, Ms Lewell; it is a pleasure to serve under your chairmanship. I thank the hon. Member for Blackpool North and Fleetwood (Lorraine Beavers) for securing the debate.
My corner of west Wales, Caerfyrddin, is no different. Multiple constituents have come to me with unacceptable experiences of trying to access their civil service pensions, as administered by Capita. Among them is Steve Dawkins, who retired this month after 24 years as a civil servant. Steve followed all the procedures and submitted his formal notice of retirement, but he has not received a formal acknowledgment of his pension claim, nor an indication of when his lump sum or monthly pension payments might be expected. His salary has stopped and he is not eligible for his state pension until September. I have sent a letter to Capita, outlining Steve’s case and urging action. I have had an acknowledgment but no action.
Rhiannon Davies-Laughlin, another constituent, has contacted Capita multiple times to request pension details but has not received a response. She also requested an annual benefit statement and was told to wait to hear within 10 days. She never did. She had to resign from her job and was due to finish work yesterday. She was intending to retire, but still does not know her pension position. I have written to Capita; I have not received a response.
We could go on to talk about many more cases, but we will finish with Sarah Rees. Last February, Sarah applied to receive her pension early because of ill health. That application was lost. The situation was similar to what the hon. Member for Blackpool North and Fleetwood (Lorraine Beavers) described. Sarah submitted the application again in July, and in November she was told that all the necessary paperwork had been received, but she did not hear back until last week. When I raised Sarah’s case during a business statement, it seemed to catch Capita’s attention, as Sarah has finally received a response, and a lump sum. But the sum was miscalculated, so I have had to write to Capita again, and you have guessed it: no response.
This is just not good enough. It is inexcusable that more than 8,000 people who retired more than 12 months ago still have not received their pension payments. Retired and retiring civil servants left in this position should seek, and have, compensation. I join the PCS Union’s call for a bespoke compensation scheme that takes account of interest on overdue payments and the financial implications of delays, as well as the distress that this scandal has caused them.
I urge the Minister and the Department, once the backlog of 90,000 cases is rectified, all pension payments have been issued and a compensation scheme has been set up, to act on the Public Accounts Committee’s report and consider bringing civil servants’ pensions back in-house to help prevent such a scandal from ever happening again.
Kate Osborne (Jarrow and Gateshead East) (Lab)
It is a pleasure to serve under your chairmanship, Ms Lewell. I thank my hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) for initiating this debate. I have been inundated with emails from constituents in Jarrow and Gateshead East regarding their civil service pensions and the unacceptable delays that people are facing. This is not just a delay on paperwork, but something that is causing huge detriment to the lives of many people in my constituency and across the UK. This issue could have been avoided. Indeed, I and others, including the parliamentary Public Accounts Committee, the National Audit Office and the trade union PCS, all raised concerns ahead of the transfer to Capita. Unfortunately, we are now seeing those concerns play out.
On 12 January I wrote to Ministers, highlighting this and asking a number of questions. I received a response just yesterday, ahead of this debate, but it did not answer all the questions, and directed me to tell constituents to email Capita, complaining about its system. Of course they had already done that, and I contacted Capita on behalf of constituents, but I have not had a response. Of course I am not surprised, as my constituents have been ignored and have been waiting for months.
The response that I have received from the Minister says, “I hope constituents feel reassured,” but I can tell you, Ms Lewell, that they do not. It does not reassure my constituent Christine, who is 65 and retired on 2 December, but has not received her pension or a lump sum. Every time she contacts Capita, she is told that she will receive it in 10 days, yet it still has not arrived, leaving her without money for months, including over Christmas. It does not reassure my constituent Pauline, who retired back in July and has still not received anything. She is repeatedly being told that her case is with the finalisation team. It does not reassure my constituent Jackie, who took early retirement to care for her grandson and help her son, and should have started receiving payments in August but has received nothing, or Christopher, who is 60 and lives on his own, with no savings and no other income. He has now been three months without a pension payment. Another constituent, Carol, is 70 and does not know when she will get any money or even how much her monthly payment should be.
None of my constituents, or many others who have been waiting for months, are reassured. These are real people, who have been waiting for months, so I ask these questions. Will the Minister instruct Capita to prioritise the people who have been without money for months, rather than continuing to process the volunteer exit scheme? Will the Minister commit to a compensation scheme covering these delays that does not force my constituents to apply through the scheme’s own laborious internal process?
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairship, Ms Lewell. I thank the hon. Member for Blackpool North and Fleetwood (Lorraine Beavers). We all owe the hon. Lady a debt for bringing forward this issue, and our constituents would agree.
I have constituents who are close to defaulting on their mortgages without their appropriate payments, and we cannot allow Capita to continue fobbing those people off. I spoke to the Minister before the debate and it is not their fault; it is Capita’s. However, my constituents would say—I hope the Chair will find my language okay—“It is time to kick ass in Capita”. I could say something worse—although I had better not.
Jim Shannon
Let me read out an email sent by a lady who worked for almost 50 years in the civil service at His Majesty’s Revenue and Customs. If anyone knows how to work the figures, then this lady does. Yet she is powerless in the face of Capita.
“I joined the Civil Service in September 1977 and retired from it on the 31 December 2025. I worked in the Inland Revenue that then became HMRC. I have not received my lump sum or final details of my pension. I telephoned Capita on the 13 January and after hanging on the line for 2hrs 10 mins (being 12 in the queue) was told by Helen a chaser would be made to processing.
She was unable to let me speak with a manager or processing and confirmed there are issues with logging/registering with the new pensions portal.
I telephoned again today and after hanging on for nearly 5hrs was told by Lilly she would send an escalation today to her manager Adrian. I asked for a call back & whilst Lilly agreed to make this request to her manager she could not guarantee it could be done. I explained I could not get onto the pension portal and she advised the issues with it would not be sorted until March.”
That is the lived experience of a lady who has dedicated almost 50 years of her working life to the civil service—a lady who knew the penalties in place for those who are paid late and who could listen to the extenuating circumstances that someone was going through. I know that the Minister is not responsible but, my goodness Capita needs a throttling.
I have five questions. Why did civil service pensions not postpone the changeover to Capita until the issues with the existing scheme were resolved? When can deadlines for resolving the issues be set? Why was the resolution of the McCloud issues not adequately resourced? When will the remaining contingent decision routes procedures be issued? Will the affordability test be applied to civil service pensions, and if so, when? The affordability test is a clause in the pension scheme allowing it to reduce the pension if it looks like it will become unaffordable. These are the implications of what happens. People can find themselves with a pension that is less than it should have been.
The Government know that the country does not operate without our knowledgeable, hard-working civil servants, but our obligation to them does not end with their final day—it continues. We are failing those who gave so much—and this must end right now.
John McDonnell (Hayes and Harlington) (Lab)
I think that we are all going to be saying much the same thing. My hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) set out a comprehensive understanding of the situation at the moment.
My latest contact has been from a Border Force guard who was planning his retirement but cannot get the information and has had to delay retirement. Others have not had their pensions paid. They are in a really serious plight. I chair the Public and Commercial Services Union parliamentary group. Let us be absolutely clear: this is a failed privatisation. It came in during the obsession of the last Government with privatisation during the early 2010s. At that time the union warned that there would be problems of this sort. We also warned that what will happen with these privatisations is that they get sold on—the companies get taken over and contracts are re-awarded. I found it shocking that Capita was awarded the contract in the first place, having lost the teachers union pension contract. I find it extraordinary that that was not properly taken into account.
People are aware that the general secretary of the union has written to the Cabinet Office about this on behalf of the union. So that hon. Members are aware what has happened, all that the union is asking for is clarity about the disclosure of the resources that Capita and others are now putting into resolving this problem. What level of staffing will be devoted to this problem? What is the timetable for resolving this problem? As many Members have said, there needs to be a direct instruction to Capita about dealing with the hardship cases—the bereavements and so on: the priorities that the members of the pension scheme have set out though their union.
The union has said it needs an assurance that if there is a prioritisation taking place, the completion of the voluntary exit schemes should be delayed. The prioritisation should be focused on getting the money out to those people who need it. Angela MacDonald has been announced as setting up the recovery scheme in the current crisis. My worry is that we might be here in two, three or four years’ time—whenever it is—because this privatisation has demonstrated that it cannot work. That is why so many members are asking the Government to please not exclude the possibility of bringing the scheme back into public administration. I do not want to be here again, pleading for people who have not had their pensions. On that point, I would like the Minister to say whether there is a clause within the existing contract that allows for its termination if it has failed, as it is failing at the moment. That could give us the opportunity for a fresh look at bringing it back in-house.
Anna Dixon (Shipley) (Lab)
It is a pleasure to serve under your chairship, Ms Lewell. I thank my hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) not only for securing this important debate, but for her excellent opening speech, which set out comprehensively and with passion the impact that this issue is having on our constituents all across the country.
As a member of the Public Accounts Committee, I am well aware of the problems with the civil service pension scheme and contributed to the report that was published on it in October. In that report, we highlighted a range of issues that we have heard about already in this debate: poor customer service and staff retention at MyCSP, long waits for pension options to be set out for those wishing to withdraw pensions, a failure from the Cabinet Office to manage transitions between suppliers, and concerns about Capita’s readiness to take the scheme over and about whether the scheme administration overall was delivering value for money.
The Cabinet Office’s response, in the Treasury minute published at the beginning of December last year, reassured the Committee that, yes, everything was in place for the success of the transition, that Capita had sufficient staffing, and that the Cabinet Office had sufficient penalties for poor performance in the contract with Capita. Does the Minister agree that the Cabinet Office underestimated Capita’s ability to take on administration and that it should indeed face consequences for severe failure?
Those issues are evident in my own constituency; I can briefly talk about a couple of them. One constituent has been trying to claim civil service pension since May 2025; they have faced long waits on the phones, emails unanswered and documents going missing. Since Capita took over, they have had new problems, such as the portal not allowing log-ins and eventually getting through on the phone only to be cut off. My constituent is suffering from financial hardship, and still waiting for the lump sum.
Another constituent, approaching 60, wanted to claim a deferred pension from January this year. The forms were posted in August. He was told he would receive a quote in November, did not receive it, and was unable to speak to Capita despite persistent attempts to contact it. The deferred pension would allow him to remain financially secure. Instead, he has reduced his hours and is now facing financial hardship. A third constituent is waiting for a lump sum to be paid on partial retirement. Again, the correct forms were sent in, but the lump sum was not received and there have been no communications.
Such examples are rife. Given the terrible hardship and worry that this fiasco has caused, I urge the Minister to explain what urgent action she is taking to rectify the situation and ensure that Capita, and not our public service pensioners, pays the price.
Ian Lavery (Blyth and Ashington) (Lab)
It is a pleasure, as ever, to serve under your chairmanship, Ms Lewell. I congratulate my hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) on securing this important debate. I declare my interest as a trade union member, and refer to the fact that I received support from the trade unions at the last election.
It is really important that we recognise who we are talking about: ordinary people, ordinary folk. Many of the people who we are discussing have worked in the civil service for many Government Departments and, shamefully, have been claiming benefits for years because their wages are that low. That is the vast majority of the people we are talking about. They brought us through the pandemic—let us not forget that. There are a lot of them in my constituency of Blyth and Ashington; I have a number of examples, which I am not sure I will be able to get through.
The root problem here, as my right hon. Friend the Member for Hayes and Harlington (John McDonnell) mentioned, is privatisation. The initial privatisation by the Tories was in 2012. It was initially DWP/Capita. Then it was MyCSP, which was a disaster. How on earth is Capita getting a secret contract agreed in 2023 to take place in 2025? It is an absolute outrage. Look at the situation now. They promised transition would be fine, but MyCSP had 16,000 unopened emails when Capita took the scheme back over. There are 1.7 million scheme members and a backlog of 90,000; there are 8,500 retired members not in receipt of any pension—and what about those in ill health and the bereaved? There is hardship, and there are issues with the interest-free loans that were promised.
Dan Carden
My hon. Friend is making a very good speech. Is it not important that this Labour Government show how they are different, and deal differently with those failed privatisations?
Ian Lavery
I totally agree with my hon. Friend. I will refer to three of my constituents. Mr Brown, from Bedlington, who retired in December and cannot get any response whatsoever to his inquiries. Mr Newell, who worked in the civil service for 40 years and has a number of questions regarding Capita, which I will send to my right hon. Friend the Minister. He spent 21 hours in total on the telephone waiting for a response, and he had additional problems. Mr Davies from Choppington raised a problem with the portal, where people cannot access details.
Those are three real issues. We need to pause the voluntary exit scheme and focus on those people who are not in receipt of their pensions at this moment in time. There needs to be more resourcing, with more staff employed to get rid of the backlog. Again, as my right hon. Friend the Member for Hayes and Harlington said, we need to consider whether Capita is carrying out the job it is supposed to. It is time to have a look at Capita and see whether it is doing the job correctly. If it is not, penalties must apply.
Jenny Riddell-Carpenter (Suffolk Coastal) (Lab)
It is a privilege to serve under your chairmanship, Ms Lewell. I thank my hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) for introducing the debate and speaking so articulately. I will not repeat the many points made by colleagues from across the House; instead, I will use this chance—of two and a half minutes, now—to talk about my casework. I want to say to my constituents that I had a meeting with the Minister yesterday, and I was reassured by how seriously the Government are taking this issue, but I am disgusted by how Capita is handling it. I want to ensure that, in every single email that I send to Capita, I am referencing this debate and the case I am bringing forward.
I have had about 10 correspondents, the first of whom is Kathleen Cassie. Again, I will be using these minutes in my correspondence with Capita. She took partial retirement in November. She has received no lump sum and no payments, and I have not had a response from Capita after chasing them. Maxine Fuller is planning for retirement. She has written four times, phoned twice and sent three messages on the portal. Surprisingly, she has had no response.
As Members can imagine, the story continues. Chris Fryer—I should say that all these people are happy to be named in Parliament—retired a year ago, and has not received a single penny after spending his entire career working as an officer for the Border Force. He has contacted them, and the same story remains: he has had no response. That is a year of not being able to make mortgage payments and the like, payments he should be able to take for granted.
It is a similar story with Lisa Andrews. She is a serving police officer who, after 37 years, applied for partial retirement on 1 December. She got cut off the portal, and she has not been able to have any correspondence with Capita. After chasing, but not hearing back, she received a lump sum, but she now awaits the monthly partial pension payment, and lo and behold—quelle surprise!—she did not receive it on 1 January.
I have many more examples, some of whom do not want to be referenced. To cite one without naming them, they were on the phone yesterday and were at 183 in the queue, but they are terrified that if I name them in Parliament, they will be sent to the back of the queue and penalised further. About 10 constituents have reached out to me about that. They are terrified. They have spent many years serving this country through the civil service, dedicating their life to it, and they should be able to look forward to their retirement—either partial or full—but they have been let down by Capita.
I look forward to the response of the Opposition spokesperson, the hon. Member for Kingswinford and South Staffordshire (Mike Wood), on how the Conservatives agreed this contract with such a lack of scrutiny, because they have not been challenged enough about that today. However, I will leave it there, Ms Lewell, because my anger is rising.
Emma Foody (Cramlington and Killingworth) (Lab/Co-op)
It is a pleasure to serve under your chairship, Ms Lewell.
Like many Members, I want to share the real impact that the serious concerns about the administration of the civil service pension scheme are having on my constituents. In the north-east, this issue is particularly acute because we have one of the largest HMRC and DWP offices in Benton Park View—often known locally as the Ministry—employing thousands of people. Civil service jobs have long been the backbone of our local economy, with many local people giving decades of their life to public service, but they are now being let down at the point when they should most be able to rely on the system.
I am regularly contacted by constituents who are spending hours on the phone—sometimes two, three or four hours—just to try to get an update on their pension, often only to be told that no one can help them or that they will receive a callback in seven to 10 days. Except, of course, that that call never comes. People are left with no information, no timescales and no way to resolve their issues. One constituent who already had a pension in payment is now being double taxed because Capita incorrectly told HMRC that she had started a new pension, rather than continuing her existing one. Despite repeated attempts to fix the issue, there has been no joy.
One civil servant with 43 years of service applied in August for partial retirement to start this year: all paperwork submitted all the paperwork, but no confirmation and no payment—nothing. After more than four decades of service, they are denied even the certainty of a planned retirement. Another constituent, with 29 years of service, claimed their pension in July and has still not received either their lump sum or any ongoing payments. As a result, they are having to rely on credit cards, incurring additional interest and struggling to meet mortgage payments—all because money to which they are entitled has not been paid. I have been contacted about a widows and orphans scheme refund of £1,940, due since July, that remains unpaid. For families dealing with bereavement, such delays only add to the strain they are already under.
As we have heard, these are not isolated cases, which points to systemic problems with how this scheme is administered. Civil servants have upheld their side of the bargain, and it is only right that the system does the same. I urge Ministers not only to examine Capita’s performance closely, but to recognise that previous MyCSP failures also need to be taken into account. I and other hon. Members want to hear what action is being taken to ensure that people receive their pensions accurately, promptly and with the respect they deserve, but also what action will be taken to hold Capital and MyCSP to account for their failures.
Several hon. Members rose—
Emma Lewell (in the Chair)
Order. To ensure that all Members wishing to speak do get to contribute, I am reducing the time limit to two and a half minutes.
Sally Jameson (Doncaster Central) (Lab/Co-op)
It is a pleasure to serve under your chairship, Ms Lewell. I refer Members to my entry in the Register of Members’ Financial Interests, which declares my various union memberships.
Many Members have made very valid points, and I will try not to echo them. To follow on from what my hon. Friend the Member for Cramlington and Killingworth (Emma Foody) said about MyCSP, I know from personal experience and the experience of my colleagues in the Prison Service that it was absolutely appalling—and, just when we thought its incompetence could not get any worse, it managed to surpass itself. I do not think any of us shed a tear when it had the contract taken away.
I am sure that Capita is full of excuses, saying “We had a terrible inheritance, because MyCSP did x, y and z”, and that is true, but Capita has huge resources of people and money, and it should have known what it was letting itself in for. It should have known how bad MyCSP was and how bad the backlog was, and if it could not do the job, it should not have taken on the contract.
I have constituents like Billy, who was considering taking partial retirement but now does not want to because he does not know if he is going to get his money. He is scared, and he is denying himself time away from work and partial retirement because of how appalling Capita is.
Will the Minister tell us what review will be done of the mismanagement of the contract, but also of how the was decision taken? I appreciate that it was taken by the previous Government, and that the Minister cannot answer for that, but what official advice was given to Ministers in the previous Government about the contract? In particular, what advice was given about break clauses? This is abject failure and we should be able to get out of the contract. What were officials in the Department advising Ministers about that? I am afraid to say that this level of failure requires accountability, and people who were involved in the procurement should never be involved in procurement for a Government contract again. We need to know who they are and what price they are going to pay, because, yet again, taxpayers are footing the bill for failure, and it is totally unacceptable.
This was not Capita’s first rodeo; it has been on the failure train many times before. The fact that it was given another contract is deeply worrying. Will the Minister confirm that Capita will not be allowed to bid for any future Government contracts, at the very least until this issue is resolved and the taxpayer has been compensated for what it has had to pay for to date? As far as I am concerned, this kind of thing should be brought back in house, so I am also interested to know what work is being done to see whether that is possible.
Euan Stainbank (Falkirk) (Lab)
It is a pleasure to serve under your chairship, Ms Lewell.
Those who serve the public deserve dignity and respect as they go into retirement, but, after a lifetime putting their shoulder to the wheel to keep the country running, that is not what my constituents in Falkirk who have been impacted by these delays feel that they are receiving. They feel utterly let down by MyCSP and Capita.
When Capita won the contract under the Tories, it promised the world—improvements to service levels and response times—and justified proposed staff reductions through a more efficient IT system. Given the value of the contract and Capita’s reputation at the time, following the management of the teachers’ pension scheme, serious questions arise for the Tory then-Ministers about whether the contract should have been signed off in November 2023.
Transitional arrangements between MyCSP and Capita failed to plan for the scale of the backlog and the required additional staffing, as the Public Accounts Committee warned in October. Those warnings were not heeded, and that has had human consequences. Mary was supposed to retire with her pension last week, but without any time to make alternative plans and after hours on the phone, she was callously told to wait her turn, months after applying and of the ball being firmly in Capita’s court. After a workplace injury forced Andrew to retire after 40 years guarding Scotland’s prisons, he has not received his pension or the capability payment tied to his scheme. Multiple more constituents have been waiting nine months and counting to receive death in service payments following their spouses’ tragically passing away. This situation is directly responsible for their financial hardship and for aggravating the emotional devastation that they feel.
Those facing hardship and crisis and those at imminent risk of retirement with no income must be prioritised in the backlog. I have written, and will continue to write to both the Minister and Capita with each of their stories. I welcome the interest-free hardship loans of up to £5,000 and £10,000 for those in exceptional circumstances secured by Labour Ministers. Those must move at pace for those in Falkirk and across the country who urgently need support.
Capita must urgently state what additional resources it is providing to clear the backlog so that the crisis is fixed and paid for by the taxpayer-funded contractor, and not any more than is necessary by the taxpayer swooping in to the rescue. Once the backlog and crisis is cleared, the recovery team must have a clear mandate to consider whether reversing this failed privatisation, as my right hon. Friend the Member for Hayes and Harlington (John McDonnell) referred to it, is the right way forward. Once the crisis is resolved, all contractual options available to the Cabinet Office must be considered. I have heard that this contract is stronger than the preceding MyCSP contract. Will the Minister say in what way it is stronger, and what further actions will be considered once the priority work for people who are sitting waiting on their pensions is completed?
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
I thank my hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) for securing this debate. It is crucial for my constituents who have dedicated their entire careers to public service at naval air stations, the Inland Revenue and the Department for Environment, Food and Rural Affairs. They all got in touch with me as a last resort due to delays and lack of information. I welcome the urgent recovery plan that has been put in place by Angela MacDonald’s team, but we need more clarity on the timeline for when the outstanding pensions matters will be resolved.
My constituents have highlighted issues with accuracy. Simon found that the figures he received were incorrect. When he questioned them, the answer from MyCSP was that he should wait until January and contact the new provider, who would sort it out. Mark, who worked at HMRC, noticed that, according to the new website, his nominated beneficiary was his dad, who has been dead for many decades. Mark queried this and was told that it is actually his wife, but the website still has not been updated. David said:
“I heard nothing. I called many times and was…on hold for 90 minutes to 2 hours. The line kept going dead, after getting from say number 105 to around 45 in that time. I got through three times this month and each time the call handler promised escalation, telling me I’m with the ‘finalisation team’, but still nothing.”
What steps are being taken by Capita and the Cabinet Office to improve the situation, and what penalty clauses have been triggered? Is consideration being given to forfeiture of the contract? What hard targets has Capita been set to get through the backlog? Did MyCSP breach its contract? What penalties has it paid?
When I was a councillor, I chaired Cornwall’s local government pension scheme, which managed to deal with 60,000 members and £2.3 billion. It had proper resources in place to deal with the McCloud judgment, among other things, and everybody gets their pension on time. That is done in house. Why cannot these civil servants, who have worked their whole life in public service, receive the same measure of fairness and respect?
Leigh Ingham (Stafford) (Lab)
I thank my hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) for securing this vital debate. As some of my colleagues have already done, I will speak about the human cost of the failures in the administration of the civil service pension scheme, and I will do so with the permission of constituents whose MyCSP cases have been handed over to Capita.
Sally Clementson was a civil servant who had paid into her pension throughout her working life. Sadly, she died in January last year. Her husband, Mark, waited months following her bereavement claim without hearing anything about the widower’s pension. During that time he was anxious, and suffered distress and serious financial hardship while grieving for his wife. Tragically, Mark himself died in November, having never received a penny of the pension that his wife had earned. To this day, his family have received no pension payments to help cover the funeral costs or mounting bills. The latest response that they received from Capita states that that is due to the backlog.
That is not an isolated case. Another constituent, Debbie Bowen, died in 2024. Her sister, Joanne Wilson, has spent over a year chasing Debbie’s pension. Solicitors were promised escalation and contact within 12 weeks, but alas no contact came. Repeated calls throughout December and January led to the same assurances, but still no resolution. Joanne has described feeling utterly frustrated and just worn down by it all.
Let me be clear: these are not complex claims. I know that many Members here have some really complex claims to deal with. The ones I am referring to are not disputed claims. They are from bereaved families, who are being left without answers, without dignity and without money. To be absolutely frank, I am apoplectic. It is unacceptable for workers or families to be left in this position.
Let me echo colleagues by asking the Minister: what immediate steps are being taken to prioritise bereavement cases? More broadly, when companies such as Capita repeatedly fail public services—let us be frank; it has done that not just in relation to pension schemes—why is that not considered during procurement processes? I used to work in procurement, and I certainly considered previous performance when I was awarding contracts. It is baffling to me that a contract was awarded to Capita when it had such a record of non-performance. Will the shadow Minister, the hon. Member for Kingswinford and South Staffordshire (Mike Wood), say why that was not considered when the previous Government awarded the contract?
Anneliese Midgley (Knowsley) (Lab)
It is a pleasure to serve under your chairmanship, Ms Lewell.
As so many colleagues have said, at the heart of this debate are people who have worked as public servants, many of them for decades. Everything that I am getting in my mailbox relates to hard-working people who have tried to do the right thing—it is just not fair, is it?
I have constituents who are afraid of losing their homes because they cannot pay their mortgages, their credit card bills, or their electricity and gas bills. But herein lies a bigger issue, I think. It is on stuff like this that the public have lost faith in us, because it is not the first time that something like this has happened. There needs to be accountability.
As my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and my hon. Friend the Member for Doncaster Central (Sally Jameson) said, Capita has a record of incompetence and crisis under its belt, including on public service pensions, so why was it awarded this contract? What advice was given to Tory Ministers, and by which officials, when the contract was awarded? What commitments has Capita given this Government about resources to clear the backlog, and what firm timelines has it given for that? Crucially, what will be the consequences if it does not hit those targets? Will it just get away with it, with a fine, a slap on the wrist or maybe a newspaper story? If this is not already failure, what constitutes failure?
As I said at the start, at the heart of this situation are people’s lives. If the Government do not get to grips with it, we will be back here again, as my right hon. Friend said, and I can foresee an ITV series starring Toby Jones in a few years’ time. I thank the Government for the sticking plaster in the form of loans for those who need them most, but the taxpayer is once again stepping in because of failure, incompetence and maladministration. I urge the Cabinet Office to do the right thing and make sure that everything is done for people who have worked hard all their lives so that they get their pensions paid.
Amanda Martin (Portsmouth North) (Lab)
It is a pleasure to serve under your chairmanship, Ms Lewell. I thank my hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) for securing this important debate on a crisis affecting thousands of public servants who find themselves without the pension they have earned and, in some cases, without any income at all. These people have paid into a scheme throughout their careers with the reasonable expectation that when they retire they will get their money—it is their deferred salary. Instead, we have witnessed from MyCSP and Capita nothing short of a shambles.
The previous Government awarded Capita a seven-year contract worth £239 million to administer the scheme, even though the warning signs were there. Where are Conservative Members today to answer and apologise? It is shameful. The result has been chaos. I want to highlight the human impact and share the experiences of some of my constituents who are bearing the brunt of the failure.
One, a former Ministry of Defence employee, was medically retired on 11 December. His lump sum and monthly payments were due to start on the 12th, but he has received nothing. Another constituent retired from the Office for National Statistics on 27 November after giving four months’ notice. He was told his lump sum would be paid within one week, but he has received nothing. A constituent who has worked for HMRC for 26 years is due to retire but cannot get a pension quote from Capita, so she cannot plan her retirement or make informed decisions. A constituent who retired from HMRC on 30 December is waiting for a lump sum of £94,000. Capita has confirmed receipt of his documents, but he has received nothing. Finally, I want to mention a constituent who worked in naval fleet support for 38 years. He decided in June 2025 to retire. Since then, the communication has been abysmal and he has received not a single penny of his pension.
Those are not isolated cases. These delays are causing genuine hardship. People are unable to pay their bills, depleting their savings and borrowing from family members, and some are borrowing from other sources, which is costing them even more. The stress that this situation is causing is horrendous. I acknowledge that the Government have appointed an expert recovery team led by Angela MacDonald and I welcome the hardship loans plan. However, that does not address the fact that a flawed procurement process selected a contractor that was not ready to go live.
I am calling for transparency—Capita must publish detailed performance data—and accountability. The Cabinet Office must make full use of its contractual rights. If Capita fails to meet recovery plan milestones, there must be serious consideration of whether it should continue to hold the contract. Finally, there should be compensation for those who have suffered financial hardship because of Capita. This crisis raises fundamental questions about how we contract out the administration of critical public services.
Cameron Thomas (Tewkesbury) (LD)
It is an honour to serve under your chairship, Ms Lewell. All credit to the hon. Member for Blackpool North and Fleetwood (Lorraine Beavers) for securing this important debate. She can so often be found calling out injustice. As is clearly the case for many MPs, recent weeks have brought forth an abundance of correspondence from constituents frustrated by unsatisfactory communication from Capita, with the anxiety borne of missed pension payments. Many of those who have experienced missed pension payments have given years or even decades of their lives to public service across key Departments, not least the Ministry of Defence and Crown Prosecution Service.
One such constituent of mine expressed that she had completed her MyCSP application in July 2025, but had then received no further communication until discovering in November that the portal had closed. Having then created a Capita account in December, she has sent three messages via the portal and attempted to call the hotline four times—to date, all without a response. Another is a retired Ministry of Defence civil servant who had worked at RAF Innsworth, now Imjin barracks, home to the Joint Casualty and Compassionate Centre. She told me that she submitted all her documentation as required, but at the end of November all telephone lines were ceased, her emails bounced back undelivered and the portal was closed. She said that her experience only worsened when Capita reopened the portal, which was apparently untested and did not allow her to log in at all. The absence of meaningful communication significantly compounded my constituent’s stress. Those affected still have no timeline for seeing their pensions paid.
Capita’s initial explanation—that these symptoms were merely teething troubles—should do nothing to convince any of us that the organisation fully understands the implications of the missed payments. It has more recently admitted to serious issues: the true scale is apparently a backlog of 86,000 cases. None of that should surprise the Government or anybody else here. I recall significant delays in the armed forces recruitment process during a period in which Capita mismanaged medical assessments. Issues similar to those faced currently were reported in the administration of the teachers’ pension scheme, again by Capita. In October 2025, the Public Accounts Committee warned the Government of a clear risk that Capita would not be ready to take on full administration in December, and it called on the Cabinet Office to explain how it would ensure sufficient staffing and resourcing.
At the heart of this issue are 1.7 million current and former civil servants who just want peace of mind from knowing that the pensions they have earned through years of public service will be handled fairly, with dignity and, if at all possible, with a base level of competence. The Liberal Democrats therefore have questions for the Minister and the shadow Minister, the hon. Member for Kingswinford and South Staffordshire (Mike Wood). I hope that in their closing speeches, they will answer some of the following.
In the light of this situation, what steps are the Government taking to support individuals who have mortgages to pay, families to feed and all manner of expenses for which they are currently being denied payment? Perhaps the shadow Minister will tell us how his Government assessed Capita’s role in the administration of the teachers’ pension scheme, where similar issues were reported. Will he explain whether Capita’s role in the administration of the teachers’ pension scheme factored in the awarding of this contract? Capita claims that the backlog it inherited was more than twice the size that it anticipated. Will the Minister tell us who is responsible for that—MyCSP, Capita, this Government or the last one?
Perhaps the hon. Member for Kingswinford and South Staffordshire, the solitary Conservative representative, will answer the following. The value of the contract is £239 million over seven years. Given Capita’s history of mismanagement, by what metrics was it determined to have won the contract? Could the Minister answer this question? Hauntingly, the contract includes an option to extend it from seven to 10 years. Will this mismanagement factor into the Government’s determination about whether to extend it?
My final question is for the Government. We can all sit here, empathise and complain about Capita, but we must learn the lessons. What lessons will the Government take from this fiasco?
Mike Wood (Kingswinford and South Staffordshire) (Con)
I congratulate the hon. Member for Blackpool North and Fleetwood (Lorraine Beavers) on securing this important and timely debate. The situation is an entirely unforced error by Capita, and it has caused real and significant financial distress to thousands of former public servants—people who dedicated their working lives to serving this country. The people affected are individuals who planned responsibly for retirement and relied on the integrity of the civil service pension scheme, but have been left anxious, frustrated and, in many cases, desperate.
Like other hon. Members, I have had several constituents contact me to say that they have been left without any income to fall back on. Mark contacted Capita several times at the start of this year without any reply at all, and he now finds that none of the links in the previous letters and emails from MyCSP work anymore. There was no transition.
In many of the cases reported by colleagues from across the country, those affected are suffering missed mortgage payments, unpaid bills and the indignity of having to borrow money simply to get by. That should never happen to anyone who has served the public in good faith.
Anna Dixon
The hon. Gentleman sets out many of the hardships and challenges, as other hon. Members have in this debate. Will he take some responsibility? Under the previous Government, when this contract was let, these problems should have been foreseen and the contract never awarded to Capita.
Mike Wood
I am sure that the hon. Lady will accept that because I was not a Minister in the previous Government, I did not have access to the tendering process, and do not have the details of the bid. However, there was a clear failure by the previous providers and there have been many opportunities since the last general election to review that contract in light of the clear failure—
Cameron Thomas
The hon. Gentleman is probably quite right to note that there were significant failings by the previous provider. Does he accept that there were clear failings by the previous Government?
Mike Wood
No. The hon. Gentleman is obviously trying to hide from the fact that his party was part of the Government that awarded that contract in 2012 to the mutual joint venture. He may wish to look at his own party’s part in that if he thinks that it was a mistake. Sadly, the information provided by the Minister for the Cabinet Office to the House last week fell well short of what is required. It failed to address the fundamental question of how the Government allowed Capita to take over the contract in December despite the repeated warnings and the signs that it had clearly failed in its key milestones.
Mike Wood
I must continue, because I have only a short time; I have given way twice. We know that in November 2023, Capita was awarded the contract to administer the civil service pension scheme, but we also know that the previous administrator, MyCSP, had its contract extended until December 2025 specifically to allow for a two-year transition period that was meant to reduce risk, not create it. The National Audit Office investigation report published in June 2025 made it clear that MyCSP had failed to meet agreed service levels in the final year of its contract, with complaints more than doubling towards the end of that contract. That is a large part of the reason why the contract was awarded elsewhere.
If I may briefly refer to the tragic case of Philippa—not a constituent but someone who I had the pleasure of meeting because she was the long-term partner of a member of staff of one of our colleagues.
John McDonnell
Will the hon. Member give way? He should not be allowed to get away with this.
Emma Lewell (in the Chair)
Order. It is obvious that the Member does not want to give way.
John McDonnell
He is not giving way because he will not admit responsibility.
Emma Lewell (in the Chair)
Order. It is up to the Member if he wishes to give way; he has made it clear that he does not wish to.
Mike Wood
I have already given way twice and I may give way later, but I need to get through my speech so that the Minister can reply, because I know that hon. Members will want to hear her response.
Philippa retired in May and suffered a nervous collapse triggered by pension delay. Tragically, Philippa died on Boxing day, so that is the very real human cost. Of course, the National Audit Office report did not stop with the failings of the final years of MyCSP’s contract. It also highlighted that Capita had failed to meet three of the six key transition milestones that were due by March 2025, all relating to scheme design and operational readiness. In other words, the warning signs were there in black and white. Ministers were on notice of the potential for serious problems, and of the consequences that those problems would have for pensioners, for at least the final half of 2025.
Leigh Ingham
Does the hon. Member agree that the warning signs were there when Capita failed on the TPS?
John McDonnell
Maybe the Ministers at the time did not see Capita’s Army recruitment fiasco, its primary care fiasco that put patients at risk, the near-collapse of the teachers’ pension scheme or the cyber-attack in which Capita exposed the data of 6.5 million people and was fined millions. Does the hon. Member not think that Ministers might have taken those into account before awarding this contract?
Mike Wood
I appreciate that the right hon. Gentleman has not always been an uncritical friend of the current Government, but he has to recognise that his party has been in government for more than a year and a half, during which there were opportunities to take action if they were unhappy with our contract.
As I said, the warning signs were there in black and white. Ministers were on notice of the potential for problems and their consequences. Despite that, on 7 July last year—a full year into this Government—the permanent secretary told the Public Accounts Committee that the Cabinet Office would decide in December whether Capita should take over administration. On 14 November 2025, the Cabinet Office wrote to trade unions confirming that Capita would indeed take over from 1 December, stating that it was satisfied—this Government, this permanent secretary and this Minister’s Department were satisfied—that Capita had taken on board the findings of those reports.
Serious questions have to be answered. What assurances were provided by Capita to Ministers before that final decision was taken at the end of last year? What scrutiny was applied to those assurances and by whom? Why, in his letter to colleagues, did the Minister for the Cabinet Office claim that these issues had only come to his attention “in recent weeks” when both the National Audit Office report in June and the Public Accounts Committee report in October warned of a “clear risk” that Capita would not be ready? The Public Accounts Committee was clear that Capita had missed seven out of its eight key transitional milestones to deliver its IT system and said:
“The Cabinet Office needs to fully develop contingency plans”.
If the Minister is right that he was only made aware of these problems in recent weeks, should the Government not have known far sooner and acted far sooner?
Although it is welcome that interest-free hardship loans are now available, this action has clearly come too late. Those loans should have been made available on an emergency basis from 1 December—the same day that Capita took over administration—so that people were not left in financial limbo. Instead, some pensioners have reported being forced to take out costly commercial loans or to borrow from friends and family simply to cover basic living costs. That is unacceptable. Can the Minister guarantee that no one affected will face further disruption beyond the end of this month? Can she guarantee that pension payments will be stabilised fully and permanently?
The warning signs were there for months, and the failure to act decisively after the publication of the National Audit Office and Public Accounts Committee reports is stark. Although it is deeply disappointing that the Government failed to prevent this from happening, we can all agree that it is now in everyone’s interest—
Mike Wood
I have given way four times; I really ought to conclude.
We can all agree that it is now in everyone’s interest for operational stability to be restored as quickly as possible, for the Government to ensure rigorously and transparently that Capita meets its contractual obligations consistently and that any penalty clauses in the contract that can be enforced are enforced to allow for compensation to be paid to those affected. Above all, we owe it to those affected—public servants who did everything asked of them—to put this right and ensure that such a failure does not happen again.
The Minister without Portfolio (Anna Turley)
It is always a pleasure to serve under your chairmanship, Ms Lewell. I draw Members’ attention to my entry in the Register of Members’ Financial Interests: I have a civil service pension, having started my career in the Home Office in 2001.
It is tradition to thank the Member who secured the debate, but I want to place on record my personal thanks to my hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) on behalf of my constituents affected by this issue and on behalf of all the constituents we have heard about today. This is a perfect example of bringing to Parliament voices that have not been heard. They have been sat in queues on phone lines, but everyone has brought their stories powerfully to Parliament and the heart of Government today. I thank my hon. Friend for that public service, which is much appreciated.
I thank all hon. Members who have raised issues on behalf of their constituents. It has been troubling to hear those stories, but it is also a testament to the system that an MP can bring the experience and voice of constituents to Government. I also want to thank and pay tribute to all the fantastic public servants who give so much in service to our country and communities.
When a civil servant retires after decades of public service, they deserve a seamless transition into the next chapter of their lives, and recognition of the contribution they have made over their career. They deserve a system that is accurate, responsive and, above all, timely. I state clearly for the record that the service experienced by members of the civil service pension scheme is absolutely unacceptable.
As the 10-year contract was signed by the previous Government in 2023, I could talk about another disastrous inheritance, but I will not. I will take responsibility and apologise because that is what today should be about: the people affected by this service. I have read the accounts of members, many of whom wrote to their MPs. I have seen that correspondence, heard the concerns and listened carefully to the individual cases raised today.
I am deeply sorry for the worry and distress this has caused so many people, particularly those dealing with bereavement, ill health and financial hardship. This is a failure: there are no two ways about it. Resolving it is a matter of utmost urgency for the Government. We are taking direct action to intervene and put things right, doing so as quickly as possible while ensuring accuracy. In response to questions raised by colleagues, I will set out our steps to undertake that.
To understand how to fix this, I want to say something quickly about how we arrived here. As I mentioned, the decision to transfer to Capita with a 10-year contract was made in 2023. The Cabinet Office will undertake a full review of the award and the management of previous pension contracts, as colleagues have asked, once we have resolved the immediate issue of service delivery. I am sure that hon. Members will share our view that the priority is to get people their money and resolve the immediate problem.
On 1 December 2025, the administration of the scheme transferred from MyCSP to Capita. Although the core payroll for 730,000 existing pensioners continues to be paid correctly and on time, the transition for new retirees has been a mess, with a large number of members significantly impacted. The main driver of the delays is the high volume of work that Capita inherited from MyCSP, approximately 86,000 work in progress cases, which was more than twice the volume planned for and anticipated during the due diligence and planning period.
In addition to the work in progress cases, the handover included 15,000 unread email messages. There were delays in loading and correctly mapping the vast amounts of data transferred from MyCSP to Capita. Technical issues were identified in setting up and receiving data interfaces between employers and the new administrator. As of the week commencing 19 January, Capita reporting showed approximately 8,500 recently retired members are waiting for their first monthly pension payment.
Although some of those individuals have now received their one-off tax-free lump sum, the delay in implementing regular pension benefit payments is causing genuine hardship, especially for those relying on their pension payment to pay for basics such as rent, food, mortgages and heating, as we have heard. Shockingly, the report also showed 6,300 open cases relating to deaths, where members have passed and bereaved families are trying to understand and settle financial affairs. I do not underestimate the trauma for many families of having to deal with that. That includes 300 sensitive death in service cases, adding huge financial worries for grieving families, which is simply unacceptable.
Member data is held by employers and fed through monthly to Capita via a secure interface. That enables pension records to be updated for any changes to personal data, employment terms and contracts. A transition of that scale requires the handover of huge amounts of complex personal data. More positively, Capita has now received the data required from the previous administrator. However, the switch of provider means that members are now required to register on a new portal. As colleagues have highlighted, there have been huge problems with the portal.
In addressing all those live issues, we must also understand the complexity of the civil service pension scheme. It is made up of five different pension schemes, and it has approximately 1.7 million members and 320 employers. It is the third largest public sector scheme, and it deals with an average of more than 3,000 retirements and more than 2,700 bereavement cases every month. That is the scale of the challenge.
Let me outline exactly what we are doing to address the problems as quickly and as efficiently as possible. Although it is a corporate failure, the Government are stepping in, and I thank the many civil servants who are working hard 24/7 to resolve this issue. My officials, along with expert colleagues from across the civil service, are working closely with senior leaders at Capita and have agreed a way forward with a full recovery plan. I am grateful to them for their hard work. We have appointed Angela MacDonald, second permanent secretary and deputy chief executive of HMRC, to lead a recovery taskforce. The team is working alongside Capita and departmental leaders to execute a plan organised into intensive three-week sprints.
On resources, we are deploying a 150-person civil service surge team specifically to clear the correspondence logjam. Capita therefore now has more than 650 staff dedicated to this contact, an increase of more than 50% in resourcing compared with the previous provider. Since 26 January, the recovery team has received data on all outstanding cases.
On the transitional help loans, we have authorised Government Departments to provide interest-free bridging loans of £5,000 and, in exceptional cases, of up to £10,000 for those in immediate need. The Department is working to get the money to those impacted within days, not weeks. We are prioritising the most urgent cases. We are working with Capita to ensure that the systems and resources are in place to deal with ill health, bereavement and financial hardship cases, alongside arrangements to clear the backlog. Those cases are our absolute priority.
On the member portal, there was already a plan to roll out greater functionality. That includes “track my case”, which allows members to see the end-to-end progress of their queries; digital requirements processes, which includes the facility for members to track the progress of their retirement application; and a lifestyle modeller, an interactive calculator to help members under the age of 55 to plan for the income they need in retirement. We will provide regular updates on the portal so that scheme members and MPs can see the progress being made to improve the service. I endeavour to ensure updates are made regularly to the House.
We expect to restore service levels for death in service cases and ill health retirement cases by the end of February. I make that pledge to Members. More widely, our current plan is that we are working to bring most aspects of the service back with expected service levels by June, but we will keep that under constant review and continue to look for opportunities to accelerate progress.
Jim Shannon
I spoke to the Minister before the debate started, and she indicated that hon. Members might have an access number and an email address. Will she provide those?
Anna Turley
I appreciate the hon. Gentleman’s flagging that point, and I was coming to that. I have taken the quite unusual step of bringing a print-out for colleagues, which will be available at the end of the debate and will be shared with colleagues more widely. It has an email address on it. I am keen that hon. Members bring their cases directly to us. Of course, we are addressing the wider issues, but it is a cause of great concern to me that, where cases are raised with Members of Parliament, they should be brought straight to our attention.
The McCloud pension sector remedy work was raised. We know how important it is for the many members awaiting an update. We have agreed a separately resourced project to deliver the remedy with Capita. Many of these cases are very complex, and we hope the majority will be issued by April ’27. We are working with the Pensions Regulator, and we will provide progress updates to the members affected and to MPs.
The new contract with Capita includes a number of key performance indicators, which colleagues have rightly raised, with financial penalties to be applied where they are not achieved. We reserve all commercial rights at present. We have already withheld millions of pounds of payments for failure to meet transitional milestones. We continue to contractually monitor service level key performance indicators linked to payments, and we have refused to waive service levels, ensuring that Capita remains contractually liable for performance.
My right hon. Friend the Member for Hayes and Harlington (John McDonnell) asked whether there was a cause for termination. There is an option to terminate in any contract of this kind. These are complex and commercial requirements, and terminating the contract and moving to another provider would mean another massive upheaval of data and everything else. I am sure colleagues share my view that the priority right now is to resolve people’s immediate concerns and issues, make sure people get their money and undertake a review of exactly what happened. However, everything is on the table. As I said, we will do a full review of these contracts, but our priority is to get people the support that they deserve. It has now been two months since Capita took on the new contract, and we are very clear that members of the pension scheme deserve so much better. Our focus is on taking fast action to resolve the most critical issues for impacted individuals while simultaneously ensuring a detailed recovery plan that brings the commercial contract back within service level agreements as quickly as possible.
I want to reassure every member of the pension scheme that their pension is safe and their data is secure. We are working, and will continue to work, tirelessly with Capita to support the recovery programme until such time as we are wholly satisfied that the service is fully recovered. We are committed to ensuring that every member is treated fairly and with respect, and that no one suffers a permanent financial loss due to these administrative failures. We are holding Capita to account and are going to kick backside, as the hon. Member for Strangford (Jim Shannon) said. We are making sure that members are at the heart of the recovery plan, and we will use every commercial lever at our disposal to ensure that Capita delivers effectively.
I thank all hon. Members who brought the voices of their constituents to the Chamber today. I have brought a handout for colleagues, and I urge anyone with constituency cases to raise them with us. We will do our best to accelerate them, but I am conscious that we have to resolve this matter not just for those who are brought to our attention but for absolutely everyone. We will hold further drop-ins to assist hon. Members and their teams, and we are doing our absolute best to make sure people get their money as quickly as possible. The House has my word, and that of my right hon. Friend the Minister for the Cabinet Office that we will not rest until the service is stabilised and our civil servants receive the support that they have earned after so many years of dedicated service—for which, once again, we thank them.
Anna Dixon
On a point of order, Ms Lewell. I would like to apologise. I need to declare an interest: I also hold a civil service pension and would like to put that on the record.
Lorraine Beavers
It has been a pleasure to serve under your chairship today, Ms Lewell. I thank all Members who attended the debate this morning.
I called this debate because constituents of mine in Blackpool North and Fleetwood, and others across the country, suffered stress, uncertainty and serious financial difficulties because of Capita’s poor administration of the civil service pension scheme. This situation is not acceptable, and it is clearly a failure. Although I appreciate the Cabinet Office’s action of offering interest-free loans of up to £10,000 and bringing in additional civil servants to help fix the problem, this situation should never have been the case in the first place.
It is essential that the process is accessible. Only yesterday, I heard that the DWP is asking applicants for personal financial information. No scheme member should have to go through that; it is not their fault that the scheme has not been managed properly. I am grateful to the Minister for her answers, and want to remind her again of the commitment that our party made before the election to begin the biggest wave of insourcing in a generation. This situation should serve as a reminder of precisely why we made that promise.
Civil servants like all of those who have written to me and visited my office in the past few months have worked immensely hard throughout their careers and delivered for our country on a daily basis. It is right that we now work urgently to remedy this situation for them by clearing the backlog and compensating those impacted in the short term, and by ensuring that this disgraceful failure never happens again in the long term. I hope that the debate has gone some way towards making clear the strength of feeling amongst our constituents and that it will ensure that they get the service that they deserve.
Question put and agreed to.
Resolved,
That this House has considered the administration of the Civil Service Pension Scheme.