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Thousands of retired teachers and leaders potentially entitled to better pensions following the landmark McCloud ruling have died before even receiving statements outlining what they could receive.
New data obtained under the Freedom of Information (FOI) Act reveals the scale of the backlog in remedy cases facing the Teachers’ Pension Scheme’s (TPS) embattled administrators Capita, with tens of thousands of retirees awaiting statements.
Every month this drags on, more people die
Madeleine Dowling, technical team lead at financial advice firm Wesleyan, said the issues were “taking a real financial and emotional toll” on retired teachers.
“After years of service, retirement should be something that teachers look forward to. Instead, many are left facing uncertainty and worry.”
Most remedies not yet issued
The McCloud remedy scheme was designed to correct age discrimination caused by 2015 public sector pension reforms. The 2018 court judgment ruled that previous changes made to public sector pensions treated younger workers unfairly.
To fix this, the government promised to pay back more than £17 billion to those affected.
This involved issuing “remediable service statements” (RSS) to retired teachers, asking whether they would like their pension entitlement to be calculated based on their current scheme, known as the “legacy” option, or the new “reformed” scheme.
Data obtained under the FOI Act shows that as of March, 64,917 such statements had been sent to retired TPS members. But 77,654 statements remained unsent.
Of the outstanding statements, 5,973, or 7.7 per cent, are due to the families of TPS members who have died since 2015 – the year to which the remedy is back-dated.
Some will have died before the 2018 ruling and before the remedy was formally announced in 2021. But it is likely a large number have also died since then, while awaiting news of potential compensation.
Delays plague thousands of unwell retirees
It comes after Schools Week revealed in June that just two retired teachers had received the money or pension increase they were entitled to.
Delays are also plaguing thousands of unwell pensioners. Of the outstanding statements, 3,539 are due to pensioners who are in “ill health”, FOI data shows.
Paul Heap, a retired teacher, said he was owed “around £14,000 from the original case, plus £7,000 in losses because of delays”.
“Some teachers have died waiting. Others, like me, are watching our health decline. Every month this drags on, more people die. We’ve worked our whole lives as teachers, and this is how we’re treated – like we don’t matter anymore.”
The delays have left a lasting mark on Graeme Humphrey, who retired in 2022 after 35 years in teaching.
He suffers from generalised anxiety disorder, and “this whole process has made it worse”, he told Schools Week.
“TPS seems to have contempt for the legal process and is seemingly disinterested in delivering legislated monies within any reasonable time scale.”
Retirees return to the classroom
For other former leaders and teachers, delays in receiving payouts have prompted a forced return to the classroom.
Former headteacher Gary Watson retired in 2022, but is owed £31,000 that should have formed part of his lump sum. He says he has had to “go back to work to supplement my income”.
“I don’t think any private sector pension provider could get away with this. Trustpilot reviews are incredibly damning, and many retired teachers [are] simply despairing at either the incompetence, under-staffing or perhaps a combination of both.”
On Trustpilot, the Teachers’ Pension Scheme has an average score of 1.1 out of five, based on 739 reviews. Ninety-five per cent of reviews give just one star.
Emma Mitchell, who taught history and geography for 30 years, has been waiting nearly a year to hear back from the TPS about her McCloud paperwork.
“I’m owed just over £10,000 as a lump sum and about £2,000 a year,” she said. “I’ve had to dip into my savings to pay for roof repairs.
“As a single parent, that money really matters – but it’s not extra. It’s ours. You give everything to your students, to your school, to the community and you expect the system you’ve paid into to be there when it’s your turn.”
Watson added: “This is scandalous. To compound matters the communication from TPS is abysmal. When will these dues be settled?”
The TPS has been run for most of the past 30 years by outsourcing giant Capita.
The £233 million, 10-year contract was due to transfer to Indian IT firm TCS in October, but Schools Week revealed earlier this year the handover had been pushed back to next summer.
‘Government turning blind eye’
Delays to McCloud settlements aren’t the only administrative issue affecting TPS members. For example, teachers have reported delays to cash-equivalent transfer values – needed to finalise divorces. Others reported being locked out of accounts, or their details being lost entirely.
Diane Tonkins, 60, sobbed over half-marked schoolbooks as she recalled being told by TPS she did not have a pension.
Decades of records, including her private pension and £2,000 in contributions, were “lost”. Worth about £30,000, the missing funds forced her to keep working while caring for parents with dementia and Alzheimer’s.
“Because of their mistake, I couldn’t retire,” she says. During Covid, her parents died in care, confused and alone, she said.
Heap said the TPS under Capita was “understaffed, lacks communication and is failing, but the government has been turning a blind eye.
“The backlog is thousands deep. They’re processing around 40 cases a month when thousands are depending on the money the government took from us.”
Dowling added Wesleyan is “increasingly seeing delays not just in the issuing of remediable pension saving statements, but in processing pensions themselves.
“This data, and our own experience, shows many are entering their retirement without an accurate understanding of how much they have in their pension – a precarious position for anyone to be in that’s only compounded if they have dependents, ill-health or care needs that mean they’re particularly reliant on this pension income.”
Calls for hardship fund
Heap said he asked officials to create a hardship fund for struggling retirees but was told there was “no need for one”.
“I went six months without glasses because I couldn’t afford new ones,” he said.
“Every month, I have to spend a quarter of my pension on paying interest that is only owed because my pension correction wasn’t completed on time. I just about manage to cover council tax, energy bills and food.”
Kate Atkinson, national secretary for school leaders’ union NAHT, said it had been “contacted by members with life-limiting conditions that are part of the backlog.
“Clearly any further delay for these individuals is unacceptable and we have asked for a ‘fast-track’ approach to be taken in relation to anyone in this group – we are hopeful that this can be achieved.”
A spokesperson for Capita acknowledged “that some members have experienced delays in receiving their remediable service statements and subsequent payments, and we sincerely apologise for this”.
However, they said the delays were “largely due to the complexity stemming from the McCloud remedy … and dependencies outside of Capita’s control.
“We are continuing to work with the Department for Education to implement measures to improve the service, which includes automation and updated communications to members.”
‘Complex legal issues’
The DfE said transitional protection remedy was “complex” due to its size. The “retrospective nature” had resulted in “a number of technical and legal issues” that “needed to be resolved before guidance could be provided to the scheme administrator”.
Officials are in touch with Capita to “address” rising numbers of enquiries.
However, a spokesperson added: “We understand that this has caused frustration and are continuing to work closely with Teachers’ Pensions to resolve this issue as soon as possible.”
It was also “reviewing arrangements for the issuing of the remaining remediable service statements”, but would give no further details.
The FOI data suggests most retirees who have received their statements and responded have opted to stick to the legacy pension scheme.
As of March, 8,488 respondents had chosen to stick with the legacy scheme, compared with 2,890 who opted for the reformed scheme.
The schools sector, which employs almost a million people in England, is not the only part of the public sector facing issues with the McCloud remedy.
Workers in the NHS, which employs about1.5 million people in England, have reported significant delays. The British Medical Association has warned the backlog has left many members with “no knowledge of their pension-saving