The Cabinet Office has agreed to offer interest‑free hardship loans to Civil Service pensioners after a backlog of delayed pension payments prompted criticism from the Public and Commercial Services (PCS) Union.
Backlog triggers financial strain for retirees
Capita, the administrator for the Civil Service Pension Scheme (CSPS), took over on 1 December 2025. Since then, the provider has reported difficulties processing tens of thousands of cases, leaving many retirees without timely pension funds. The PCS Union said the delays have caused “financial hardship” for members, some of whom are coping with bereavement or ill health.
It acknowledged the problems and noted that many members cannot log in to the CSPS online portal. In a joint statement, the company and the Cabinet Office expressed regret and pledged to prioritize “the most urgent cases” by the end of February.
Angela MacDonald, deputy chief executive of HM Revenue & Customs, has been tasked with leading an “urgent recovery plan.” The plan includes allocating 150 additional staff to assist Capita in clearing a backlog of 86 000 cases inherited from the previous administrator, MyCSP.
Hardship loans and union response
In a press release dated 29 January, the Cabinet Office announced that it would provide interest‑free hardship loans to civil servants who have been left without pensions due to the delays. The PCS Union welcomed the move as a “first step” but warned that further assistance is needed.
Union general secretary Fran Heathcote emphasized that the loans do not erase the damage already done. “Civil servants who have been left in financial hardship because of delays receiving their pensions should never have been put in this position in the first place,” she said.
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The union also called for a compensation scheme to cover interest on overdue payments, additional costs, and the distress suffered. PCS has previously staged strike action over the handling of the CSPS transfer and continues to press for the scheme to be brought back in-house.
Steps toward resolution
Civil Service chief financial officer Catherine Little and Capita chief executive Adolfo Hernandez issued a joint statement on 28 January acknowledging the delays.
Capita aims to restore bereavement support services by 12 February, according to the PCS Union. In addition, the administrator is working on a separate project to complete the McCloud remedy for the CSPS, which involves notifying 95 000 members about their benefit choices.
Regular meetings between PCS, other civil service unions, and CSPS management are ongoing to monitor progress and ensure that concerns are addressed promptly.
Retirees await the promised fixes.
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