The ex-civil servant pensioners given LOANS to pay their payments – as tens of hundreds are left with out revenue

Tens of thousands of people are caught up in a scandal engulfing one of Britain’s most generous pension schemes.

A customer service meltdown at the civil service pension scheme has worsened since Money Mail revealed last week that some members had been left without any retirement income for months.

The 86,000-case backlog has now swelled to 120,000, forcing the Government to look at providing emergency loans to those experiencing hardship as they wait for their money.

At the start of this month, some 8,500 retired civil servants had not yet received the pension payments they were due.

Money Mail has been inundated with messages from despairing employees past and present, laying bare the suffering caused by the chaos. 

Many say they have been left waiting months to receive their payments or lump sums, while letters and phone calls are going unanswered, and grieving families tell us they are unable to sort out estates.

We have put a dossier of 20 of the most severe cases to Capita, the contractor which took over running the scheme in December.

In one case, retired prison officer Jason Gould says the lack of retirement income has pushed him into rent arrears and forced him to incur extra interest on debts.

The 58-year-old from Norfolk and his wife Lisa, 62, who has also just given up her job after a 44-year nursing career, fear their dream of retiring to Spain this spring is now in jeopardy. 

Jason says he has not received any pension since he finished working at the end of December despite being promised his lump sum would arrive a few days after his retirement date.

He is concerned he will have to wait months longer. If so, he won’t be able to prove his pension income to the Spanish authorities, which is required to extend his current visa. Without it, his and Lisa’s future there is in doubt.

He says: ‘I’m still finding it difficult to accept that this has happened to so many people when nobody seems to care or be able to help. Had I known, I wouldn’t have retired.

‘It’s absolutely awful. I am in disbelief about the situation I find myself in. It keeps us awake at night – we were so looking forward to retiring and it’s ruined it. What a dreadful experience.’

The civil service scheme is considered gold standard because members receive generous final salary or career average salary-linked pensions, which are guaranteed until they die.

But it was already mired in problems when Capita took over administration from MyCSP towards the end of last year.

Civil service boss Catherine Little has now drafted in the deputy boss of HMRC, Angela MacDonald, to oversee an urgent recovery plan. In a frank letter to the Public Accounts Committee (PAC) of MPs sent last month, she explained the troubles before and after the transition. 

She describes ‘significant concerns’ about complaints regarding MyCSP, which was subject to two probes last year.

 Problems were then ‘further exacerbated’ by a dispute between the Public and Commercial Services union and MyCSP, which led to a strike from July to December last year.

Little’s letter says strike action contributed to a ‘significant backlog of work’, and then Capita experienced a very high volume of inquiries on its arrival – on average 3,600 calls per day, compared with around 1,300 a day under MyCSP. 

But Little also criticises Capita for ‘lower than expected levels of automation’ and ‘misjudged assumptions made on productivity for manual processes’, which suggests that tasks are taking longer than needed and the company may need more manpower.

And she says the civil service is making interest-free bridging loans of £5,000, or £10,000 in exceptional cases, to help alleviate hardship for those experiencing delays getting pensions.

The chairman of the PAC, Geoffrey Clifton-Brown, replied that people were ‘currently experiencing intolerable levels of service’, and that Capita will be appearing to give evidence to the committee on Thursday. 

Former pensions minister Ros Altmann, who now sits in the House of Lords, says: ‘I am told that Capita and the Cabinet Office were taken aback at how many urgent – and non-urgent – issues had not been dealt with, dating back way before Capita started and they have now had to pick up the pieces.

‘I feel for all those who have been badly affected by this.’

Unite, a union representing many civil servants, condemned the appointment of Capita to run the scheme. 

It said last week: ‘Unite had previously issued stark warnings directly to the Cabinet Office about Capita’s incompetence and highlighted its poor performance, but had reassurances that this contract was different to Capita’s other contracts.’

Unite general secretary Sharon Graham adds: ‘Capita’s running of civil service pensions goes from chaos to calamity. 

That a company which has shown repeatedly that it is incapable of running the pension scheme for 700 firefighters has been given the keys to the entire civil service scheme beggars belief.

‘Unite will continue to highlight Capita’s incompetence and pressure ministers to bring this service back in house at the earliest opportunity.’

Jason, who was in the Army for six years before spending the rest of his working life in the prison service, says: ‘I have given over 41 years of public service and was therefore looking forward to a well-earned retirement.

‘My job wasn’t well paid but we were guaranteed a reasonable pension at the end.’

But, like other readers who have contacted us, he says the early days of his retirement have been spent on the phone waiting for Capita to answer and then getting no help when staff do pick up.

Jason adds: ‘I informed them that my rent was due this week and that I had outstanding debts which I needed to pay off with my lump sum. 

This made no difference to Capita – they simply apologised for the delay, and said they hoped to catch up sometime in the future but could not give a timescale.

‘They said nothing would be done this week and to simply call back next week. I was repeatedly told ‘we are where we are’ and that I could not be given a date on which I would receive my pension and lump sum.’

Jason says the prospect of moving to Spain without his pension in place, and having to keep chasing Capita from there, was giving him and his wife sleepless nights.

They are hoping to buy a new home in Almeria in the south-east of the country, but he says: ‘Without my lump sum and monthly pension payment, our long yearned for dream of living in Spain will be ruined through no fault of our own.’

He adds that the couple have decided to leave the UK because they believe the country is broken. ‘The debacle with my pension is further proof of that. We also could not afford to retire and stay here as everything is so expensive compared to Spain.’

Bereaved families are also caught up in the havoc, as they struggle to sort out their loved ones’ finances. Capita was dealing with 6,300 death-related cases at the start of this month.

Gillian Bergonzi, 87, lost her 91-year-old husband Toni in November, but has not received anything further from the civil service pension scheme since his last payment in late October.

‘I am entitled to three months’ full pension and then half,’ says Gillian, who lives in the West Midlands and whose husband worked for HMRC for 40 years.

‘It is now February, what am I supposed to live on? Or are they hoping I die and they won’t have to pay it at all? I’m finding it difficult living on only fresh air.’

Another reader, Mary, who preferred not to give her surname, says she took the difficult decision to retire from the civil service following the sudden death of her son last year. 

She says: ‘I too completed all the forms many months ago. And I had a couple of helpful calls with MyCSP before the transition of ‘service’ to Capita. Since then, total silence.’ 

The 60-year-old, who lives in Surrey, describes spending many hours trying to get through on the phone, being on hold for hours and then cut off.

Mary says: ‘I am hoping you raising the profile of this might finally get traction for all of us, already stressed at giving up work, and for me personally dealing with untold grief.’

Daniel O’Brien and his wife Arlene are anxiously waiting for news about his pension to find out if he can retire on his 62nd birthday in March.

Daniel, who has been a civil servant for 40 years and lives in Argyll and Bute, Scotland,

says: ‘I have phoned, emailed umpteen times with no updates on whether I will be retiring and what my pension figures actually will be.’

We asked Capita to respond to Jason’s case and address a further dossier of cases.

A spokesman says: ‘Capita and the Cabinet Office are deeply sorry for the worry, frustration, and distress this has caused. 

Both Capita and the Cabinet Office take this responsibility very seriously and are urgently working together to put this right, prioritising the most urgent cases.

‘When Capita took over administration of the Civil Service Pension Scheme on December 1, 2025, a backlog of 86,000 cases was inherited from the previous administrator. 

‘Since the transition we have been working towards reducing the inherited backlog and are also working on new cases. 

‘Capita expects to restore service levels for the most urgent cases by the end of February, with full recovery of the remaining priority cases to follow.’

Capita adds that it has more than 500 full-time staff working on civil service pensions, 50 per cent more than its predecessor MyCSP, and it is adding resources to handle more cases and deliver better response times at its contact centre.

A spokesman for MyCSP says: ‘MyCSP completed a comprehensive handover of the pension scheme with the new provider, which was overseen by the Cabinet Office.

‘All outstanding work items were fully disclosed, discussed and reviewed with Cabinet Office senior management prior to commencement of the handover process. 

‘Over the course of its tenure administering the scheme, MyCSP consistently met the service levels set by the Cabinet Office as independently confirmed in the National Audit Office’s assessment of performance.’

A Cabinet Office spokesman said: ‘The service levels following the move to Capita have been unacceptable. 

‘An urgent recovery plan is under way, 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.’

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