UK spending watchdog opens investigation into Capita's pension fiasco

The UK's public spending watchdog is investigating the troubled transfer of the Civil Service Pension Scheme (CSPS) to Capita. In a notice, the National Audit Office (NAO) said problems had persisted since the outsourcer took over administration in December 2025. The Cabinet Office awarded Capita the seven-year 239 million contract in November 2023, allowing two years to prepare for the transition. The scheme serves 1.5 million current and former public servants. "Key service levels have been repeatedly missed, leaving many members struggling to access the information they need to plan for their retirement," the NAO said. Capita promised AI and automation, but the takeover brought a glitchy online portal, while some members struggled to receive pension payments. Capita missed its deadline to restore normal service by the end of June. It subsequently told MPs that all but the most complex cases would return to normal service by September. Responding to the investigation, Capita said it "accepts that performance remains below the standards that scheme members and the Government rightly expect" and that fixing the problems was its top priority. Scheme members interviewed by the BBC last month described feeling upset, frustrated, and ignored, with some waiting months for payments. One woman had been waiting six months for her widow's pension after her husband died in March. Capita said it would cooperate with parliamentary and regulatory investigations, and continue to engage fully and transparently with the NAO, Cabinet Office, and relevant stakeholders. "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," it said. (R)