Capita faces fresh probe over its bungled handling of the civil service pension scheme

Updated: 04:37 EDT, 2 October 2026 Capita has been hit with a fresh government review over its failures in administering its civil service pension scheme (CSPS) contract.The National Audit Office said it would probe the handling of the 1.7 million-member scheme, expanding an earlier investigation from June 2025.The review by the spending watchdog will add to pressure on the outsourcing firm, which said the performance 'remains below standards' despite making 'good operational progress'.It said: 'Capita recognises the need for continued service improvement, and we are implementing further automation along with stronger governance including improved management information. 'This will continue to improve operational output and member experience. Capita has been blasted for its handling of the scheme, leaving pensioners facing long delays'Capita accepts that performance remains below the standards that scheme members and the Government rightly expect. The remediation of CSPS remains the Group's top priority.'Capita took over the CSPS from previous administrator MyCSP last December, inheriting a backlog of more than 86,000 cases. By early February, Capita confirmed it had risen to over 120,000 cases.The service meltdown, reported by This Is Money and Money Mail, saw pensioners and bereaved families face months-long delays in receiving their pensions.The government introduced a recovery plan in February following 'unacceptable service levels' including an emergency interest-free loan scheme and the deployment of 150 civil servants and 100 additional Capita staff to prioritise urgent cases.But Capita failed to meet the end of June deadline to restore the service, prompting the government to withhold £9.9million in payments and note the possibility of bringing the contract back into government management.The outsourcing group flagged a profit hit of up to £40million as a result of the issues.Last month, the civil service pension taskforce said Capita had reported meeting its self-imposed September 1 target but performance was still 'unacceptable'.'It does not constitute full service recovery and still leaves far too many scheme members facing uncertainty while they wait for their cases to be resolved,' said Richard Vianello, director of the taskforce. 'Overall Capita's performance remains unacceptable.'This Is Money has reported on a string of cases, including former prison officer Jason Gould whose plans with his wife to retire to Spain were nearly scuppered, as they were thrust into rent arrears and could not afford to pay off debts.We also covered the case of bereaved mother Teresa Cook, who could not settle the financial affairs of her late daughter, who was a civil servant for more than two decades.Have you been hit by the backlog? editor@thisismoney.co.ukDIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you