Pensions Crisis Update

What's Gone Wrong?

Thousands of civil servants are facing serious delays to their pension payments because of a major failure in how the Civil Service Pension Scheme is being run. The problem has hit hardest those who retired in the last six months, with some left months without income.

PCS is campaigning to fix the crisis and to end the failed outsourcing model that caused it.

How We Got Here

• In 2012, the Tory-led coalition government privatised the administration of Civil Service Pensions.

• In 2022, the Cabinet Office decided to re-tender the contract after ten years with MyCSP.

• Capita won a £239 million contract, running until 2030.

• In 2025, the Cabinet Office admitted preparations for moving to Capita were not adequate.

• On 1 December 2025, when Capita took over, there was a catastrophic service failure.

The Scale Of The Failure

• Capita inherited 86,000 overdue cases, which grew to 120,000 by February 2026.

• At least 8,500 newly retired civil servants had pension payments delayed.

• Some members have had no income for months, causing real financial hardship.

• Problems include: 

  • No access to the online pension portal

  • Missing or incomplete pension records

  • Long waits on helplines

• Those affected include: 

  • People retiring on health grounds

  • Bereaved families waiting for survivor pensions

PCS reps, PCS Associate and Retired Members, MPs and our sister unions have had to deal with huge numbers of urgent cases from distressed members.

PCS Campaign Action

Throughout 2026, PCS has intensified its campaign by:

• Coordinating media, parliamentary and branch-level work

• Securing national and local media coverage

• Tabling an Early Day Motion (a formal parliamentary motion to raise pressure)

• Briefing MPs ahead of a well-attended Westminster Hall debate

These actions have forced government intervention. 

PCS’s central demand is clear:

Bring pension administration back in-house, ending reliance on failing private contracts.

Government Statement 22 April

On 22 April, Paymaster General Nick Thomas-Symonds told Parliament:

• The Capita contract for the Royal Mail Statutory Pension Scheme has been cancelled

• He raised serious concerns about Capita’s performance on Civil Service Pensions

• Capita must clear a backlog of 24,000 pension quotes by the end of June 

PCS General Secretary Fran Heathcote responded:

“When a contractor fails, contracts can and should be ended. The same must apply in the Civil Service Pension Scheme.”

Latest Update

Key points reported at our latest meeting with the Cabinet Office:

• 138 members affected by a data breach have been contacted; the incident has been reported to the Information Commissioner’s Office (the UK data protection regulator).

• Call waiting times worsened due to: 

  • Missing 2024/25 Annual Benefit Statements

  • The 2026 pensioner mailing

  • End-of-tax-year queries

  • Knock-on effects of the data breach

  • Waiting times peaked at 47 minutes in mid-April.

• Members who have already received the maximum £10,000 transition loan and still need help are advised to ask their former employer to urgently escalate their case to Capita.

• Of the 8,063 retirement cases inherited on 1 December 2025: 

  • All lump sums have now been paid

  • Monthly pension payments will begin during May

  • Interest on late payments will be paid later by Capita.

• Capita plans to issue the 24,000 outstanding pension quotes by the end of June. 

  • This does not mean payments will be made by then.

  • Most of these members are likely to be paid in July or August.

False promises on service recovery

Capita has promised to restore full service levels by the end of June. This promise was repeated by the Paymaster General on 22 April. However, based on official updates, it is clear to us that this target will not be met.

Adding insult to injury

In February 2026, Capita was named as the preferred bidder for the Synergy contract, which handles payroll and some other HR functions for more than 250,000 civil servants in the DWP, 

Home Office, Ministry of Justice, the Department for Environment, Food & Rural Affairs and related bodies.

The contract worth over £700 million sits within the government’s “Synergy” shared services cluster, part of a strategy to collapse 286 legacy systems into five major platforms through a single cloud-based system to cover HR, payroll, finance and procurement.

PCS warned that giving the contract to Capita is a serious and unnecessary risk to the livelihoods of civil servants who depend on accurate, timely pay.

PCS general secretary, Fran Heathcote, wrote to the work and pensions secretary, Pat McFadden MP to request an urgent meeting, saying: 

"It is nothing short of astounding to us, that a company with such an appalling track record, should be trusted with the vital payroll and HR functions for what amounts to almost half of the total number of staff working in the civil service.”

The campaign continues

PCS has consistently warned that:

• Capita cannot deliver

• The pension administration system is in crisis

• Only an in-house service can restore reliable and effective pension administration and deliver the service our members deserve

PCS has formally advised the Cabinet Office to start preparing now to end the Capita contract and we have demanded that the Synergy contract is urgently reviewed by Ministers and brought back in house too.

Take action

Support our demands by using our e-actions to write to your MP about the Capita Pensions Crisis and the Capita Synergy contract (see below). 

Keep in touch with the campaign via PCS Merseyside ARMs socials.

Join PCS ARMs

PCS ARMs is you and thousands of other members joining together for a strong voice. If you are not a member now is the time to join us.

e-Action: Civil Service Pensions Crisis

Ask your MP for urgent action on Capita Civil Service Pension Administration. Click here for more information on how you can help.

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