UK spending watchdog opens investigation into Capita's pension fiasco

The UK's public spending watchdog, the National Audit Office (NAO), has launched an investigation into the management of the Civil Service Pension Scheme (CSPS) after it was transferred to Capita. This follows persistent issues since Capita took over administration of the scheme in December 2025. The Cabinet Office awarded Capita a £239 million contract in November 2023, granting it two years to prepare for the transition. The CSPS serves 1.5 million current and former public servants.

The investigation focuses on repeated failures to meet service level targets, leaving many members unable to access the information they need to plan for retirement. Despite Capita's promises of AI and automation, an online portal malfunctioned, and some members faced difficulties receiving pension payments. Capita was unable to meet a deadline to restore normal service by the end of June and later told MPs that all but the most complex cases would return to normal by September.

Capita has acknowledged that performance has fallen below the standards expected by scheme members and the government, and it has stated that fixing the problems is its priority. Members interviewed by the BBC expressed feelings of upset, frustration, and being ignored, with some waiting months for pension payments. One woman had been waiting six months for her widow's pension after her husband died in March.

Capita has agreed to cooperate with parliamentary and regulatory investigations and will continue to engage transparently with the NAO, Cabinet Office, and relevant stakeholders. The company claims to be implementing further automation and strengthening governance to improve its operations and member experience.