The Government has paid out more than £2m worth of loans to retired civil service employees who have been delayed in receiving their pension because of administrative problems, The i Paper has found.
Thousands of ex-civil servants have been left facing “unacceptable” delays in receiving their pension payments after management of the employer’s pension scheme was transferred to a new company last December.
Retirees told The i Paper they had been left struggling to pay their bills, and the Cabinet Office, a department at the centre of the Government, devised a loan scheme to provide temporary relief to pensioners stuck waiting for their money.
New FeatureIn ShortQuick Stories. Same trusted journalism.
Former civil servants can receive up to £10,000 interest-free loans, and these are expected to be repaid in full within 28 days of them receiving their delayed pension payments.
Data obtained through a Freedom of Information request submitted by The i Paper to the Cabinet Office found that as of 24 February, civil service employers had paid out 417 loans to former workers. The average loan value paid out was £5,554, with the total value of loans paid being £2,315,887.
Control of the civil service pension scheme’s administration switched to Capita after the previous company behind it – MyCSP – came under fire for poor service.
The i Paper had heard from multiple ex-civil servants who have been left unable to access their pensions and faced difficulties contacting Capita.
Capita told The i Paper it was making “sustained progress” in addressing the backlog it inherited from the previous provider.
It added: “Additional staff have been trained and deployed, and we are working to restore full normal service as quickly as possible. We are sorry for the worry, distress and frustration this has caused.”
In a Public Accounts Committee (PAC) meeting last month, Capita bosses gave assurances on when they expect to improve the situation.
They said they expect to resume normal levels of customer service by the end of March and ensure all recurring payments are in place by the end of April.
The FDA, the union that represents senior civil servants, said thousands of ex-employees were still awaiting payments and around 14,000 existing pension quote requests to be completed.
Adrian Prandle, general secretary at the FDA, warned the £5,000 loans would not last if members did not receive the totality of their payments more quickly.
“People owed money from before the transfer are not responsible for who the pension administrator was at the time. They deserve to be repaid for their full losses,” he said.
The Cabinet Office is working with Capita to address the delays and has created a crisis team led by Angela MacDonald, second permanent secretary at HMRC, to tackle the most urgent cases, like those dealing with bereavement or ill-health.
The pension scheme will apply interest when the pension payments are paid more than one month after a pensioner’s retirement date, and this will apply for payments made from 1 December 2025.
How to apply for a pension loan
An existing civil servant who has partially retired or a civil servant who has retired since 1 January 2025, can contact their employer to access one of the loans.
You should try to collate evidence of the hardship need, such as data showing you have faced a delay getting your money.
If you retired before this date, yet are still at risk of experiencing financial hardship due to delayed payment of their pension, you should contact Capita and mention the financial impact of these delays.