The National Audit Office has launched a fresh investigation into the troubled transfer and administration of the Civil Service Pension Scheme by outsourcing giant Capita.
The public spending watchdog will examine the Cabinet Office's management of the transfer and Capita's performance since it took over administration of the scheme on 1 December 2025.
Capita's contract is worth £239 million over seven years.
The NAO says that despite a two-year transition period, Capita has struggled to administer the scheme effectively, with key service levels repeatedly missed and some members unable to receive the information or payments they need on time.
£22.1m paid in support loans
The problems have been serious enough for the Cabinet Office to introduce transitional support loans for members who did not receive pension payments to which they were entitled.
According to the NAO, £22.1 million had been paid to more than 3,900 members by August 2026.
The watchdog says some members who were due to retire have been forced to change their plans because payments did not arrive when expected.
What will the NAO investigate?
The investigation will examine three main areas:
- the status of the scheme and transition arrangements when Capita went live in December 2025;
- Capita's performance in administering the scheme and the impact on members since the transfer; and
- how the Cabinet Office exercised its oversight responsibilities before and after the transition.
The NAO has made clear that the investigation will not examine individual pension calculations.
The new work builds on the watchdog's June 2025 investigation into administration of the Civil Service Pension Scheme, which focused primarily on MyCSP's customer service and preparations for the transfer to Capita.
Capita admits performance remains below expected standards
Capita has acknowledged the NAO's decision and says it will cooperate fully and transparently with the watchdog, the Cabinet Office and other relevant stakeholders.
The company said it had made what it described as “good operational progress” across priority areas during August and September.
However, Capita also acknowledged that its performance “remains below the standards that scheme members and the Government rightly expect”.
The company said remediation of the Civil Service Pension Scheme remains its top priority and that it is introducing further automation, stronger governance and improved management information.
Government says overall performance remains unacceptable
The latest NAO intervention comes after the Government said in September that Capita had failed to meet its commitment to fully restore the scheme to contractual service levels by the end of June.
In a written statement to Parliament, Cabinet Office Parliamentary Secretary Sally Jameson said Capita had reported clearing workable stock cases across five priority areas by 1 September.
However, she said meeting that milestone did not amount to full service recovery and described overall performance as “unacceptable”.
The Government said it continued to use contractual and commercial measures to hold Capita to account and was working on a longer-term strategy to bring administration of the pension scheme back in-house.
Problems began before Capita took over
The difficulties surrounding the scheme pre-date Capita's takeover.
The NAO's June 2025 investigation found longstanding customer-service problems under previous administrator MyCSP. It also found that Capita had missed three key transition milestones before taking over the scheme.
The Cabinet Office consequently withheld £9.6 million in transition payments because Capita had failed to deliver all agreed requirements associated with those milestones.
The fresh NAO investigation is expected to report in winter 2026/27.
Sources
- National Audit Office: Transfer of the Civil Service Pension Scheme to Capita — work in progress
- Capita: Statement regarding the National Audit Office review of Civil Service Pension Scheme administration — 2 October 2026
- UK Parliament: Cabinet Office statement on the Civil Service Pension Scheme — 9 September 2026