Bereaved families affected by severe delays paying out civil service pensions could face an “unjust” tax bill, the government has been warned.<\/p>\n
Under HMRC rules, certain lump sum pension payments must be paid within two years of the pension scheme being notified of a death to remain tax-free.<\/p>\n
Conservative MP Sir Geoffrey Clifton-Brown, who chairs Parliament’s Public Accounts Committee, said it was “unconscionable” some families could face a “death tax” through no fault of their own.<\/p>\n
The Cabinet Office said that if delays caused a tax charge there were existing avenues to claim compensation, such as the Pensions Ombudsman.<\/p>\n
However, the ombudsman is currently advising that standard complaints are only likely to be resolved within 18 months, with more complex cases facing a longer wait.<\/p>\n
The Civil Service Pension scheme manages the pensions of 1.7 million public sector workers in the UK.<\/p>\n
Outsourcing firm Capita took over the administration of the scheme from a company called MyCSP in December 2025, saying it inherited a backlog of more than 86,000 cases.<\/p>\n
Despite a two-year transition period to prepare for the takeover, problems have persisted and by February the backlog had grown to 120,000 cases.<\/p>\n
Retired civil servants and bereaved families have been left waiting months for pension payments, with some struggling to pay bills.<\/p>\n","protected":false},"excerpt":{"rendered":"Bereaved families affected by severe delays paying out civil service pensions could face an “unjust” tax bill, the…\n","protected":false},"author":2,"featured_media":635306,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[138,246,111,139,69,244,245],"class_list":["post-635305","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-new-zealand","tag-newzealand","tag-nz","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/635305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=635305"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/635305\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/635306"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=635305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=635305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=635305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}