Money Box Live: Capita, What Went Wrong?

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1:28Hello. Today's Moneybox Live is a special podcast looking at what on earth is going on with Capita, which administers millions of people's pensions, widows left without, newly retired people with no idea when they'll get their money, the frustration of feeling ignored by an enormous company while your finances fall apart. It is the biggest issue in the Moneybox inbox right now, and we have covered it again and again and again. Dreadful, shambles, a mess. Words chosen to describe the current crisis at the civil service pension... The anger is the anger I struggle to deal with. And I just feel like I've been lied to.

2:10This is causing me and my family, not just me, but my family, difficulties in emotional, physical. I should be making memories and enjoying my time with my family, my children, my grandchildren, my friends. and I can't. It's six months since Capita took over the job of administering the civil service pension scheme, but thousands of people who deal with benefits, tax, border security and all the key things the state does for us are still waiting for their pension payments that haven't arrived. And almost... If I may, I'm going to start with an apology. This service is not meeting in any sense the service that Capita seeks to deliver or the...

2:51Every time I've tried to get through to them in the past, it can take up to three hours to get through to a helpline. If I ring up your helpline now, I'm not in one of those two priority cases. How long will I be waiting? The average wait time last week for not in those priority cases was an hour and 55 minutes. When Capita took over the running of the civil service pension scheme, it says it inherited a backlog of 86 ,000 cases, which has subsequently grown to 120 ,000 cases. I don't know what I'm going to get or when I'm going to get anything at all. I had my last salary and now there's nothing.

3:28They admitted the turnaround is usually 20 days from registering the death. Hang on, 20 days? 20 days it should take. And you were five months and only because Moneybox got involved? Absolutely, yes. I think if you hadn't got involved, I'd still be waiting. Just some of the hundreds of stories you have sent us about civil service and teachers' pensions that haven't been paid out by Capita, the company in charge of administering them. We have heard repeated promises from Capita and even the government that problems would be fixed. But thousands of cases are still outstanding. So today we're asking Capita, what went wrong?

4:07Let's start the programme, though, with a call from Amy. Amy, hello. Hi. Thank you for being with us. Now, you got in touch, and this is using your own words, out of desperation, really. What's your situation? So, my stepdad sadly died the 1st of July last year. He was an MOD police officer for over 40 years. And my mum is still waiting for his pension over 15 months later. And what kind of impact is that having on her? Oh, it's awful. She feels completely ignored, palmed off. She's exhausted. Yeah. And all that while she and you are presumably grieving for your stepdad, David. Yeah. It's very, very difficult.

4:50What has Capita told you about what's going on? Well, mum's rung them every month since his death and she's just been told it's getting escalated. It's getting escalated with no communication, not telling us escalated to what or anything. Any kind of timeframe given? None. Just the words escalated all the time. I can hear from your voice that you must be very worried about your mum. Yes, I am. Like I said, she's exhausted, stressed. It's just not fair. It's just not fair. Do you live nearby? Are you able to help out while she's dealing with this? She's in Wales and I'm in Wiltshire at the minute, but we speak every day.

5:33And how is it affecting her in terms of her finances, her ongoing kind of quality of life? Well, she has to think about every penny that she's spending, as well as trying to adjust to life without my stepdad. It sounds incredibly hard. Yeah, it's been awful, awful time for her. Very stressful. And not easy on you either. Amy, thank you so much for starting the programme and just explaining one example of this. Moneybox reporter Dan Whitworth is with me. Dan, you've been covering this since the start of the year. Amy's mum's case must sound sadly familiar. It does, hugely familiar. And I think, Fliss, the thing that gets me about this story is the scale of it.

6:17Now, obviously, that's in part due to, of course, the fact that the civil service pension scheme is one of the largest in the country. There's 1.7 million members. But we are constantly inundated with messages to Moneybox. And they're cases like Amy and her mum and her stepdad. and there are some that are even worse, quite frankly, and there are some that are a bit more sort of almost normal, but even the normal ones, the financial impact on people is huge and the messages started at the start of the year and we are still getting them. This is a problem that is not going away. In fact, we've had an extraordinary number of messages just today since we said we were doing this programme.

6:57Dan, what's the latest? What has Capita said? Well, we did, of course, invite someone from Capita onto the programme as we have done many other times, Fliss. Capita didn't acknowledge that request this time round, so we put Amy's case to them last week, which is being looked into, it says. In the meantime, it sent us another statement. It says, sorry, again, that is a word we've heard a lot from Capita, for the impact that service issues have had on members, despite what Capita says is good operational progress. I'm not sure too many of the people contacting us would agree with that. Capita says it recognises there's more to do.

7:31It's working closely with the Cabinet Office. And remember, the Cabinet Office, that has overall responsibility for the management of this pension scheme to resolve outstanding cases and restore the service to the standard members should expect. And again, Fliss, this is not the first time we've heard this. We've been reporting on it since January, February time. Yes, absolutely. The beginning of the year. Thank you, Dan. You are staying with us through the programme, but also joining us today to help us get some answers are Fran Heathcote, General Secretary at the Public and Commercial Services Union, which represents a lot of these affected workers and retired people.

8:06And also Sir Geoffrey Clifton Brown, Conservative MP and Chair of the Public Accounts Committee, which is question capita about these issues three times. Good afternoon. Good to have you both with us. Good afternoon. Fran, thank you. Fran, our inbox, it's just full of cases like Amy's. As Dan says, the civil service pension is one of the largest schemes in the UK with 1.7 million members. This is appalling, isn't it? It's absolutely appalling. And my inbox, like yours, is absolutely full of examples such as Amy's. And Amy's case is heartbreaking, but so are so many of them. I mean, I just think that it's on a scale with a post office scandal.

8:49We are having the impact of not just existing civil servants looking to retire, but those who have retired, those who are considering retirement, those who are facing ill health retirement, or in fact, those who are terminally ill. So the scale of this is massive. As you say, it's a big pension scheme, but it's not the biggest pension scheme. And it's clear that something needs to change. So Geoffrey, just to remind people, Capita took over civil service pensions. They transferred from MyCSP to Capita in December last year and the company says it inherited a huge backlog of around 86 ,000 cases which then grew bigger.

9:26Do we have any idea of the scale of the problem now? So just to go back to that and put it into context, we held a hearing as long ago as a year ago last July and we told the Cabinet and we recommended to the Cabinet Office that we didn't think that they would be ready, they and Capital would be ready to go live. This has been going with Capital since the 1st of December last year, so it's almost ten and a half months into this dreadful saga and I have to say in my opening remarks, because I must give my sincere commiserations to Amy. It's a dreadful situation that she finds herself in with her family.

10:05And, I mean, to go since the 1st of July 25 and still waiting is completely unacceptable. And we've had five hearings now, including the one when we said they weren't ready. and finally it culminated in the minister getting involved in our last joint hearing and we received a letter since that hearing from the Permanent Secretary which said Capita's delivery continues to underperform. Now that's the most senior person in the Cabinet Office. This is a real indictment on Capita. There are signs in the latest figures that I've got in front of me which are at the end of September that some things are getting slightly better.

10:49Bereavement is getting slightly better. Death in service is slightly worse. Ill health requirements, slightly worse. And payments, definitely slightly worse. So some things are up, some things are down. But the Cabinet Office, at long last, has taken some real powerful action. They've appointed Grant Thornton as the professional people to adjudicate on what payments are due to capita. but a capita's payments at the moment are 9.9 million being held by the government. Yes. And a rectification officer. Now, they are going to get reports from both of those, and then they will consider what action to take.

11:27Okay. But irrespective of that, they should be now, after all this time, after 10 and a half months, they should be on top of this, and they're not. I think I'm genuinely staggered by the scale of emails and messages that we're getting in. As this programme is going on, we're 12 minutes in, and we're getting so many messages from our listeners. One of them, these delays are causing our listeners all sorts of different kinds of issues. Rob has emailed to say he's been waiting almost two years following the death of his brother and his case still isn't resolved. He's worried because there's a deadline imposed by HMRC that if the lump sum isn't paid within two years, the government taxes it.

12:02Dan, is that right? Well, look, Fliss, we asked the Cabinet Office about this and the answer might not be very welcome. So the pension lump sum death benefit will be taxed if it's not paid within two years. That's just the rule. Now, the amount depends on the beneficiary's income tax rate. We asked if there'd be any leniency for those caught up in all of this. We were told people affected by delays through no fault of their own can contact the pensions ombudsman. Just a quick note on that, Fliss. current wait times, as displayed on the Ombudsman's website this morning, is up to 18 months for simple cases, even longer for more complicated ones.

12:39Geoffrey, is that a good enough response from the Cabinet Office? No, it's certainly not. And I have written to the Minister today to ask what she's going to do about it, the new Deputy Prime Minister, Louise Haig. And, I mean, the thing is that it may be the norm that cases, that the people who haven't had their lump sum payment after two years would be taxed. But that rule doesn't cover where there is so much delay caused by the administrators. And I think the government will seriously need to see whether they can exercise some discretion here. Host Thanksgiving with industry-leading quality standards from Whole Foods Market.

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13:58Visit your online broker and get started. See what adding futures can do for you at cmegroup.com forward slash podcast. Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This is not a recommendation or offer to buy, sell, or attain any specific investment or service. Okay. Let's hear from another listener. Stephanie sent us this voice note. My beloved Alan died at the end of May. Our situation was very uncomplicated. He'd been drawing his civil service pension for a long time. We'd been married for a long time.

14:36I provided all of the paperwork very quickly. And here I am still waiting. it's a horrible situation and I've been doing everything that I can my MP is on it I ring every week and speak to some poor person on the civil service pensions helpline who you know essentially they can do nothing because well because nobody knows why they can do nothing there's just a sort of level of bafflement that everyone has where you know the the output of all of these conversations and all of these discussions and emails and phone calls it's like I know isn't it awful it's so difficult I'm so sorry this is happening to you I've now been told that maybe when it is 150 days since Alan died I might get onto some super list um and things might get dealt with more quickly but it's really horrible having a note in my diary of when it's 150 days since I lost my person.

15:40So yeah, the whole thing is an absolute disaster. Stephanie, thank you so much for sharing that. Fran, can you just quickly explain what this super list Stephanie talks about is? Yeah, now Stephanie makes a really good point. The staff who administer the scheme are not at fault. And I think, you know, we need to remember that they are also suffering in this situation because the the capital clearly aren't properly resourced we think that there is an argument for bringing some of this work back in the house and which would give the government greater control over the way that this is being administered but um in terms of a super list it is clear that there are a growing number of cases that have as you know definitely heartbreakingly just explained, hitting the 150 day mark and the idea that you would then go on to a super list, which might give you some priority.

16:34We have a parliamentary group, we meet with MPs regularly, all of them have constituents who are on a weekly basis contacting them about this. And we've had people that have been waiting since before Christmas, still haven't received a payments still haven't received any um idea of in some cases even a forecast of what they're likely to get so my heart breaks for stephanie but there are there are so many of these cases now okay i don't think it's acceptable for the government to just kick this into the long grass there needs to be a decision made about what they do now in terms of you know as i say even if the it is a little bit more complex bringing the control of the scheme back in house that they have ultimately control all over it.

17:18Well, I mean, the Cabinet Office, which as we said, has overall responsibility for the civil service pension scheme, has told this programme service levels are unacceptable and added that the government is actively shaping a long-term strategy to bring this pension scheme back in-house. But I just want to also hear this. Stephanie also emailed the CEO of Capita, Adolfo Hernandez, hoping to find some answers there. And this is the response that she got. It's been voiced by a member of our team. Dear Stephanie, thank you for reaching out and for sharing both your concerns and your beautiful tribute to Alan.

17:51The warmth, humour, love and generosity that defined Alan's life come through so clearly, as does the happiness you shared over almost 30 years together. I sincerely apologise you are still awaiting your widow's pensions and recognise the financial strain and emotional burden this is placing on you. Well, he goes on to say that he's asked the senior complaints team to review it. Geoffrey, again, an apology, and apologies don't pay the bills. Now, your Public Accounts Committee has already questioned Capita three times. How is it that almost a year after that contract was transferred over, thousands of people like Stephanie, like Amy's mum, they're still without their money.

18:29What can you tell them? So it's actually five times, including the case before they started on the 1st of December. I have a letter from Capita dated the 10th of September, 2026. and it says all workable stock cases across the five priority processes, and this includes bereavement, were completed by the 31st of August 2026. Now, it may be that there's something that I'm not understanding here, but it sounds to me as though Stephanie's case would come in that and that actually what we're being told by, what I'm being told by Capita is not actually true. Now I would like to take this up with Capita because I think in those three cases, as you've already said, we've been given false deadlines in every single one of those hearings.

19:23First it was March, then it was April, then it was June and every time it hasn't happened. And I'm just beginning to think this is another deadline as a result of our July hearing that hasn't happened. So if Stephanie would be, I don't normally, and I don't, you know, it isn't proper really for the chairman of the public accounts to take up individual cases. But as it does seem that it's contravening what I've been told in a letter, which, you know, is not right. I would like to actually query this with Capita. If Stephanie would be kind enough to email me the details after this program, CliftonBrownG at parliament.uk, or you can give her the details.

20:00We'll absolutely pass that on and in fact we're getting messages and emails that might also be relevant there which we will share with you as well Fran, you've wanted it to be brought back in-house as I say the Cabinet Office says it's actively shaping a long-term strategy to do that is that filling you with confidence? Well, it's a little bit more complicated than that because we've already got 150 current civil servants bailing out this failure from capital so the idea that it's not costing the taxpayers pair, we are paying civil servants to do the work that Capita should be doing. And I think the Cabinet Office is acting like someone who recognises they've taken a wrong fork in the road, desperately hopes that if they keep going in the same direction, they'll find a signpost that will get them back on track.

20:45And I think every time we have an update from Capita, we are told that things are improving and the evidence is to the contrary. So, you know, I think there has to be a point when we recognise that this is not improving. All the signs were there even before the 1st of December that they didn't have the capacity to take on this contract. And so I do think now is the time for them to take decisive action to bring the control of this scheme back into the civil service. I should also say, because we're getting emails about teachers' pensions, they've also been affected by this. They're now being transferred to Tata consultancy services in just a couple of weeks time.

21:28Okay, we've heard from bereaved families. What about people simply getting ready to retire? There are currently around 23 ,000 people waiting to get a pension quote from Capita. Here's just one of them. This is Denise. I gave five months notice of my retirement and the quotation request was made by my employer at the start of November last year. I retired as planned on the 31st of March this year. So in a couple of weeks, it'll be 12 months since that quotation was requested. So essentially, you're already retired, but you don't know how much you can expect and you don't know when you're going to get it.

22:03I don't. I don't. I mean, communications from Capita have been poor. I received a pension estimate in July, which is a pre-retirement forecast, which I hadn't asked for. And there were obvious errors in the figures. I followed this up with a phone call and I was on hold for one and a half hours. I chased Capita again via their contact facility on their website, and I got a standard email reply saying, do we expect to clear the remaining backlogs by September 2026? Well, that's passed. Well, it has passed. And like all previous dates set by Capita, they've passed. To be honest, I'd be surprised if it's sorted by the end of the year.

22:41Is it affecting any of your plans? Just, I mean, there's just nothing I can do. I think that's the annoying thing. You know, you just feel helpless. and I really am. There's nothing I can do. The ball is in Capita's court and to be honest, they can take as long as they like. I mean, what can I do? I shouldn't have to be in this position. You know, I've worked for the civil service for over 20 years and put a lot of effort into my job and this is the last thing I expected when I retired. Really, really appreciate your time, Denise. Thank you. And I really appreciate Moneyboxers keeping this a live issue because I, you know, I really think it needs sorting out and if Moneybox can help then that's great.

23:21Denise thank you so much for that and Dan we do have an update on her case don't we? Yeah so Capita emailed us to say it's now confirmed Denise's pension quote has been processed and was sent to her by both email and post yesterday of course that is just a quote she still hasn't received any money. Thank you we had a whatsapp message that says a three year and three month delay promised multiple times I'm in a priority group but zero joy. Geoffrey we've also had an email from Sylvia who says she's finally receiving her late husband's pension 10 months after he died. She said she was told interest will be paid on the pension because it took so long to be paid out.

23:58When can she and other people in the same boat expect that money? Well we have raised this issue in our hearings and I think there is an expectation that interest on late payments will be made but I can't confirm that and that is something that the government really need to pin down with capita but in all fairness I do think this interest on late payments should be made but I stress that has not been agreed yet. What about any redress or compensation for any financial harm that's been caused? Well again this is another issue that we've raised and I do think again consideration should be made of compensation.

24:33We've raised that too in our hearings but as I say it's up to the government to pin this down with capita. If the government have the contract with capita, it is up to them to be able to pin these things down. Fran, for people like Denise, or like the many, many people emailing and messaging who are in that situation, left without any money, is there any financial help or support they can turn to? There is. The unions negotiated an interest-free loan, emergency interest-free loan system last year, and initially more than 8 ,500 retired or partially retired civil servants who were experiencing delays accessed that.

25:12In July, the value of those loans had reached 15.6 million. So that just gives you some idea of the scale. You know, I feel for Denise, but again, we have thousands of these cases. Christina contacted me. She took partial retirement on the 1st of July, 25, with the intention of fully retiring. And to date, she still hasn't even had a forecast that tells her what her pension payments would be. So she's gone ahead with her part of retirement. She's started to receive money, but with no explanation of how that's made up. And so what that's led to is a whole layer of our members who have made plans for retirement are now terrified to retire in case they don't get anything and can't even get a forecast.

26:01So it's really serious. It's pretty serious. Let's hear from another person. Let's hear from retired civil servant Mark next. He's been speaking to our producer, Sarah Rogers. I hoped to live on my civil service pension after 41 years of service. I was getting my pension when I partially retired and then took early voluntary severance. and again was receiving my pension up until February of this year when all of a sudden payments stopped without any any notification and that's that no more payments I've phoned a capita several times I've emailed them several times I haven't had anything in response you just get given a reference number and that's it nothing how have you been coping how have you been living up till now well I've had no direct income all I've been living on is is savings which are obviously are rapidly running out.

26:51So yeah, I've got no income. Over the last 10 months, it's had a serious effect on my family, my mental health, and my ability to enjoy my retirement and to even just do the things that we had long planned after, you know, a 40 plus year career in the civil service. We had plans to do lots of different things. We've just not been able to do that. And yeah, and now I'm looking at potentially having to go back to work to support myself and my family. Thank you so much, Mark. It's a frightening thought to imagine your income just stopping, Fran. You can hear the emotional toll it's taking on, Mark.

27:26Money is a big part of this, but it's having a huge impact on people's well-being as well, isn't it? Not just their bank accounts. It is. Mark alluded to his mental health and sadly, a lot of the cases that we're getting are people who have been really seriously affected by this. People who are having to borrow off friends and family or in real hardship in terms of how they can pay their bills, how they can pay their mortgage, how they can meet their living costs. And so this cannot be allowed to continue. And we're meeting with the Cabinet Office. We're meeting with ministers. I've got a meeting with Louise Hagen half an hour.

28:04But we need to do all we can. And I welcome Geoffrey's comments. But clearly, we all need to work together to put enough pressure on to ensure that this madness is brought to an end because the scale of it is immense. Do tell her that the Moneybox podcast will be available about 5pm today. Geoffrey, we've heard then that the government's been withholding money from Capitan,£9.9 million so far. Is that enough? Well, this is what the rectification officer and Grant Thornton in their audit are going to absolutely advise the government on. That's why they've been appointed at Capita's expense. Their reports are not yet available, but we've asked to see them as soon as they are.

28:47From that, the government will decide whether the right amount of money is permanently withheld from Capita. Could I just say one thing on the transition support? Weekly if you can, because we're all out of time. Transition support is only available for those that have worked in the civil service for the last 12 months or died within the last 12 months. So whilst they are a large amount already being paid out, they are restrictive and the government should make them less restrictive. Thank you very much. Dan, seconds to go. We're not the only ones with questions. The National Audit Office now investigating.

29:15Yeah, unusual for them to speak to the press before their investigation is complete. They've spoken to Moneybox. They're obviously aware of the scale of this issue. A lot more on that with Paul and me on Saturday. We've had a lot more emails from people affected by this crisis at Capita. So there's lots for Dan to talk about with Paul Lewis in Moneybox at midday on Saturday. Thank you, Dan, for joining us on the Moneybox Live podcast. And thank you to our experts. We've been hearing from Fran Heathcote from the Public and Commercial Services Union and Sir Geoffrey Clifton-Brown, MP and Chair of the Public Accounts Committee.

29:45And from pensions to premiums to problems with providers, so much of the journalism we do comes from you telling us your stories. So get in touch. And since Dan is still here, he can tell you how. Well, you can email moneybox at bbc.co.uk or send us a message or voice note on WhatsApp. The number is 033 06 783 183. We really do read and listen to every message. Thank you, Dan. We really do. In fact, quite often he does. In this podcast, the producer was Sarah Rogers, the reporter Dan Whitworth, studio manager Craig Boardman. Our editor is Jess Quayle. I'm Felicity Hanna, and this was a BBC News Money & Work production for BBC Sounds.

30:23I haven't seen my son since 2012. That's the last time I hugged him. I know that my son is somewhere alive. This is Deborah Tice Her son Austin is one of the biggest missing person cases in the world And for years I've been searching for him Oh gunshots Somebody's written a message and all on blood What do you want from me? I should solve the mystery I want to know about my son Where is Austin Tice? From BBC Radio 4 Listen on the I'm Not A Monster Presents podcast on BBC Sounds Thank you. or offer to buy, sell, or attain any specific investment or service. Self-directed investing, trading, full-service wealth management, automated investing, financial planning, thematic investing, retirement planning.

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