THE FUSE

Civil servants who have been left in financial hardship because of delays receiving their pensions are being offered interest-free loans of up to £10,000.

Cabinet Office Minister Nick Thomas-Symonds told MPs the waits faced by retired civil servants were "completely and utterly unacceptable".

The government said around 8,500 people have had issues with pension payments since Capita took over the administration of the Civil Service Pension Scheme in December.

The company has apologised to those affected, saying it inherited a backlog of 86,000 cases.

Appearing in front of MPs on Parliament's Public Administration and Constitutional Affairs Committee on Wednesday, Thomas-Symonds said he had signed off on hardship loans, which would be administered by government departments.

Catherine Little, chief operating officer for the Civil Service, told the committee the standard level for the loans would be £5,000, with up to £10,000 for exceptional cases.

A joint statement from Capita and Little said: "This is not the service members deserve.

"Capita and the Cabinet Office are deeply sorry for the worry, frustration and distress this has caused - particularly for those dealing with bereavement or ill health."

They said the most urgent cases, for example those experiencing bereavement, ill-health or hardship would be prioritised, with those expected to be dealt with by the end of February.

More than 150 additional staff have been brought in to Captia to clear the backlog, bringing the total workforce to more than 650.

Those experiencing financial hardship are advised to contact their former department directly for support, if they retired within the last 12 months.

Those who left more than 12 months ago should contact Capita.

The PCS union, which represents civil servants, said some of its members had been left unable to pay bills, facing bank charges or relying on family support.

It is calling for a compensation scheme to cover interest on overdue payments, additional financial costs caused by delays and the distress and inconvenience suffered by pensioners.

The union's general secretary Fran Heathcote said: "This situation continues to cause serious financial and emotional hardship for people who have worked and paid into their pensions all their lives. Pensioners should not have to wait months for money they are legally entitled to receive.

"The government must ensure the Civil Service Pension Scheme is properly resourced and preferably brought back in house."

Until the end of November 2025, the scheme was administered by a company called MyCSP.

The contract was taken over by Capita on 1 December, in a seven-year deal worth £239m.

MPs on the Public Accounts Committee warned in October there was a risk Capita would not be ready to take over administration of the scheme as planned in December.

Capita said that when it took over it had expected a backlog of 37,000 cases but the actual number was 86,000.