The Paymaster General and Minister for the Cabinet Office, Nick Thomas‑Symonds, provided an update in the House of Commons this week on Capita’s performance across several public sector pension contracts, including the Civil Service Pension Scheme (CSPS).
Royal Mail pension contract
In his statement, the Minister confirmed that the government has taken the decision to terminate Capita’s future contract to administer the Royal Mail Statutory Pension Scheme. This decision was taken due to Capita’s failure to meet key transition milestones and a lack of confidence in its ability to implement and transition to the new operating model within the required timescales.
An assessment will be carried out to identify the best way forward for this service and will include an analysis of both insource and outsource options.
Civil Service Pension Scheme (CSPS)
Turning to the CSPS, the Minister acknowledged that Capita had failed to meet assurances given on the transition to the new administration arrangements and on managing backlogs. He told the House that the delays experienced by members in accessing pension benefits and key information are unacceptable, particularly given members’ many years of public service.
The Minister also stated that Capita had been instructed as early as July 2025 to prepare for the volumes of work it is now receiving and that it should not have been surprised by demand. He highlighted that Capita failed to deliver the IT automation and member portal functionality required when the service went live.
It has now been confirmed by Capita that they have offered to cover the costs of additional surge capacity deployed by the Cabinet Office from 10 April 2026 in support of the recovery plan.
Volume 784: debated on Wednesday 22 April 2026 – Pension Schemes – Hansard – UK Parliament
Summary of Taskforce Update
Angela MacDonald, Second Permanent Secretary, HMRC, confirmed that the CSPS recovery programme has entered a critical phase. While many thousands of pensions have now been put into payment and lump sums paid, a substantial number of members are still waiting. The update acknowledged that recent issues and inconsistent messaging have understandably undermined confidence.
It was accepted that previous communications were unclear, particularly regarding Capita’s commitment to contact members who submitted a quote request before 1 December 2025 by 10 April. The intention had been that all members would be contacted. In practice, Capita only contacted those who also had a last day of service before that date and where additional retirement information was required. Members with retirement dates after 1 December were assumed to remain in the work queue. This lack of clarity caused confusion and distress, for which the Taskforce apologised, committing to more precise communication going forward.
One of the most significant outstanding issues relates to pension quotations. There are currently over 23,000 quotes in the queue, with a commitment to complete processing by the end of June 2026. Processing means ensuring employer data is correct and pension records are accurate so that a quotation can be issued. Quotes will be processed in batches and not necessarily in strict retirement-date order, particularly where additional employer information is required. As a result, some members may receive quotes earlier than others, but all quotes remain within the scope of the end-of-June commitment. Receipt of a quote does not automatically mean immediate payment, as retirement processing and payment cycles will follow.
Contact centre performance has deteriorated due to increased demand, including data breach queries, end-of-year activity and pensioner mailings. While additional resources are being deployed, members are asked not to contact the centre unless their enquiry is urgent, as escalations do not speed up processing and divert resources away from casework.
Capita has committed to restoring contractual service levels by the end of June 2026.
You can view Taskforce Update #6 (23 April 2026) here: Member Knowledge Article
CSPA engagement and member support
CSPA continues to meet weekly with the Cabinet Office to raise concerns about CSPS administration and to escalate individual member cases, particularly where significant delays or unresolved issues persist, so that they are addressed as part of the recovery process.
Whilst we welcome some of the progress made since the HMRC Taskforce, led by Angela MacDonald, was deployed into Capita in February, serious and systemic failures in the administration of the scheme remain. These shortcomings continue to cause real financial difficulty, as well as significant physical and mental distress, for many scheme members.
Beyond the unacceptable delays in pension payments, one of the most persistent frustrations for members is the lack of clear, timely and meaningful communication from Capita. This erosion of trust is compounding distress and must be addressed as a matter of urgency.
