UK Government to Take Over Pension Scheme After 'Unacceptable' Service Failures

The UK government has announced plans to bring the civil service pension scheme back in-house after finding the private contractor Capita's management 'unacceptable'. The government admitted that retired civil servants were left waiting up to a year for payments, leading to financial hardship for some. Estimated 17,000 relatives of deceased claimants are also facing delays in payments.

'Unacceptable' Service Standards

■Capita inherited a backlog of 90,000 cases when it took over the scheme.

■The government admitted Capita spent the transition period improving its systems but still failed to meet standards.

■An 98-year-old woman, whose husband was a retired civil servant, waited three months to receive her pension payments.

■A young widow was forced to claim universal credit after delays in processing her late husband's £86,000 death-in-service benefit.

Government's Decision

■The government will apply 'robust commercial levers' to hold Capita accountable and plans to bring the scheme in-house as part of a 'generational insourcing wave'.

■Cabinet Office minister Nick Thomas-Symonds called the scheme a 'prime candidate for insourcing in the future'.

The pension scheme's mismanagement adds to concerns about trust in public services in the UK. Such failures risk further damaging the financial security of retired civil servants and deepen government worries about public sector reform.