National Audit Office launches review into Capita’s handling of civil service pension scheme
Capita has said the public spending watchdog has launched a review into its administration of the Civil Service Pension Scheme, after admitting its performance “remains below” the standards expected.
The National Audit Office (NAO) has launched a further formal review into the London-listed outsourcer’s handling of the scheme, building on the watchdog’s initial June 2025 investigation, prior to Capita taking over the the Civil Service Pension Scheme (CSPS).
The NAO decided to launch the review following widespread service failures and processing backlogs after Capita took over full administration in December 2025.
In a statement on Friday, Capita said: “As a strategic supplier to the UK government, Capita… will continue to engage fully and transparently with the NAO, Cabinet Office and relevant stakeholders.
“Capita accepts that performance remains below the standards that scheme members and the government rightly expect. The remediation of CSPS remains the group’s top priority.”
Public and Parliament outcry
The watchdog’s investigation highlighted that Capita had already missed three transition milestones prior to taking over the scheme, leading the Cabinet Office to withhold £9.6m in transition payments.
Scheme members have raised concerns surrounding delays in receiving pension payouts and responses to queries. Backlogs affected vulnerable groups in particular, including those seeking bereavement claims and death-in-service benefit payments.
Capita also failed to meet multiple milestones during and after the handover from the previous administrator, MyCSP, prompting questions in Parliament over whether the outsourcer had the capacity and readiness to handle the scheme.
The company said it “recognises the need for continued service improvement”, but has made “good operational progress” in priority areas of the scheme in August and September.
Capita lost its statutory pension scheme with Royal Mail earlier this year, after the government cancelled its contract following a loss of confidence in the firm.