The public sector pension outsourcing disaster continues to leave former civil servants facing financial hardship and keep them in the dark over a resolution.
One retired civil servant, who is currently living off his dwindling savings due to pension delays, wrote to prime minister Keir Starmer over the botched takeover of the pension administration by Capita. “There should be no doubt that I am incandescent with the way that I – and tens of thousands of others – are being treated,” he wrote.
Four months into retirement, following over 40 years of service, former civil servant Steve Tessier, who has no other source of income, has not received a penny in pension payments or any contact from the government or pension administrator Capita.
In 2023, the Cabinet Office awarded Capita a seven-year contract worth £239m for the administration of the civil service pension scheme, which has 1.7 million members. The takeover from the previous administrator, MyCSP, took place on 1 December 2025.
As reported by Computer Weekly, during a recent Public Accounts Committee meeting, Capita told MPs that thousands of unread emails and millions of database errors, inherited by Capita, were part of the problem.
In January, an HMRC troubleshooter was brought in to lead an “urgent recovery plan”. In an update this week, the government said that “remaining pension arrears are scheduled for payment within the next eight weeks, and interest will be applied to all delayed sums”, adding that all 15,000 unread emails have now been opened and assessed.
It said the project to clear the backlog is entering what it described as the third “sprint”, which began this week and will run until 20 March. “This phase will focus on the final resolution of priority backlogs and ensuring the system is prepared for long-term stability,” it added.
Lost control
Tessier, who spent most of his career at the Ministry of Defence, as well as a spell on secondment at Nato, said that when outsourcing came, he was not ideologically opposed to it.
“There’s nothing that says that what happens in the public sector has to stay in the public sector, especially when it comes to the provision of administrative support and contracted services,” he told Computer Weekly. “But the way we’ve set about it is we’ve become totally reliant on outsourcing companies. We’ve lost control and we’ve lost accountability over the services that those companies provide.”
In his letter to Starmer, he raised important questions about the government’s outsourcing.
“My main aim is of course to get paid,” he wrote. “But my case, along with the thousands of others, raises broader issues on which I would greatly appreciate your views.”
Tessier asked the Prime Minister what assessment was made of Capita’s ability to undertake the work, and what were the identified risks, together with their mitigation.
He also questioned “the adequacy of the communication with, and support provided to, retirees”.
“Bluntly, I don’t think that the absence of direct personal communication is remotely acceptable when people are being deprived of their main source of income for an extended period,” said Tessier.
He also called for answers around accountability. “Who is accountable for this state of affairs, and what action will be taken to enforce it?” asked Tessier.
“Who’s responsible for that is an interesting question in my view. Was it handed over to Capita properly, in good order, with full visibility, etc, by MyCSP? I don’t know. Seemingly not, but that’s highly circumstantial.”
He questioned the role of the Cabinet Office as the public sector steward of the overall scheme. “In my experience, if you’re letting any form of contract, especially for something as sensitive and complex as this and the financial scale as well, [you] ought to be doing a proper due diligence process where you make a judgment as to the ability of a potential contractor to do the work to the total satisfactory standard.”
A Cabinet Office spokesperson said: “An urgent [pension scheme] recovery plan is underway, and our immediate priority is to stabilise the service and give current and former civil servants the service they deserve.
“An interest-free loan is being made available via departments to provide immediate financial support where it is needed.”
