Troubleshooter steps in as Capita and civil service bosses apologise for pension scheme problems

An HMRC troubleshooter is stepping in to lead an “urgent recovery plan” as the civil service pension scheme experiences difficulties, following the transfer to new supplier. There are now plans to add an extra 150 staff to the service, prioritise urgent cases and help people in financial hardship.

Civil service COO and the boss of new supplier Capita have apologised for problems as the civil service pension scheme (CSPS) administration changes hands, blaming a case backlog for problems.

In a joint statement, civil service COO Catherine Little, and Capita CEO Adolfo Hernandez, wrote to “address the serious issues affecting civil service pension scheme members”.

In 2023, the Cabinet Office awarded Capita a seven-year contract worth £239m for the administration of the CSPS, which has 1.5 million members. In October 2025, through a public accounts committee (PAC) report, MPs warned that there were concerns that Capita would not be ready to take over the pension scheme’s administration from MyCSP by 1 December 2025.

Members of the scheme have reported problems such as “difficulty logging into the portal, incomplete pension details, long waits on customer service calls, and delays to pension quotes and payments”, according to the statement from the bosses. They added that this has caused financial hardship in some cases.

Urgent recovery plan

The statement pointed to a backlog of cases to deal with as a reason for the problems: “When Capita took over administration on 1 December 2025, they inherited a backlog of 86,000 cases from the previous administrator, a significant proportion of which was already overdue. This led to higher than expected volumes of calls and complex queries which created further issues.

“This is not the service members deserve. Capita and the Cabinet Office are deeply sorry for the worry, frustration and distress this has caused – particularly for those dealing with bereavement or ill health.”

Angela MacDonald, deputy CEO at the HMRC, will now lead oversight of an urgent recovery plan. This will include an additional 150 Capita staff, along with short-term financial support for people suffering hardship. Capita said that it expects to restore service levels for the most urgent cases by the end of February.

October’s PAC report on the administration of the CSPS cited inadequate staff levels, unrealistic automation targets and missed IT milestones as concerns. MPs said a planned reduction to the workforce, over-ambitious automation targets and the decision to use a simplified IT option in the interim cast doubt on Capita meeting the deadline.

The report also said Capita plans to reduce the number of staff running the scheme by 33 to 299. The Cabinet Office, which awarded the contract, told the PAC that fewer staff would be needed as automation technology is adopted. “For example, it was assumed in Capita’s plans that 95% of transactions would be automated,” the report stated.

The PAC said Capita has also missed milestones for delivering its IT infrastructure and will now produce a simplified IT system when the contract begins, “to de-risk delivery, with further functionality currently expected to be deployed by March 2026”.

Capita told Computer Weekly in October that it will be employing more staff (506) than were employed by MyCSP (332).