Pension delays and fraud figures

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1:05Hello, welcome to this Moneybox podcast. The Bank of England holds interest rates but says inflation will rise and oil prices stay high. Fraud hits a five-year high as half a billion pounds is stolen from individuals manipulated into trusting the thieves. And it's so easy just to tap and pay when you're abroad. But how can you avoid the 3 % most banks add on when you do? But first, it now seems certain that Capita will not keep its promise to fix problems with the civil service pension scheme by the end of June. That commitment was given by its chief executive, Richard Holroyd, to Parliament's Public Accounts Committee earlier this year.

1:48We'll get the reaction from the committee chair, Sir Geoffrey Clifton-Brown, shortly. But first, Dan Whitworth has been continuing his investigations into this long-running story, which he first reported on in February. Dan, just remind us how we got here. Well, the civil service pension scheme, Paul, is one of the biggest in the country. 1.7 million members. Since Capita took over the administration of that scheme in December, in a£239 million contract awarded by the Cabinet Office, Tens of thousands of current and former civil servants have faced long delays in things such as being paid lump sums, getting their monthly payments or even finding out basic queries like how much pension they're due to receive.

2:31Now, all of this has led to serious financial hardships for thousands of people, many of whom have worked in the civil service for decades. Now, capita bosses were called before Parliament's Public Accounts Committee several times in the spring. and in March they promised this would all be fixed by the end of June. So here is Sir Geoffrey quoting a letter from the Permanent Secretary to the Cabinet Office to Capita's Chief Executive Richard Holroyd. I want to be really clear about this recovery plan by the end of June and I want to quote to you the actual words on this from Cat Little on this published letter on the 24th of March.

3:13It says, my clear expectation is that all core pension functions, including new retirement processing and quotations, return to standard contractual levels by the end of June 2026. Do you agree with that and will it happen? I do agree. And that is what is going to happen. That is what is going to happen? Yes. Thank you. So Dan, there's Capita in effect promising these problems would be fixed by the end of June, but you've heard reports that promise won't be met. Correct. So we put that specific question to Capita and it didn't answer it. We also put it to the Cabinet Office, which also didn't answer it.

3:54What we did find out, though, Paul, is that the PCS Union, and that represents nearly 200 ,000 civil servants, says it was told just over a week ago by senior Cabinet Office officials that June 30th deadline for normal service levels to resume will now not be met. And just how bad has this been, Dan, for the thousands of actual people caught up in all of this? Well, here's some context for you, Paul. So the Cabinet Office started issuing emergency hardship loans back in January. So far, it's issued nearly£13 million through almost 2 ,500 repayable loans, and they range from£5 ,000 to£10 ,000 to£20 ,000.

4:37I've also been told stories, Paul, about people who have missed mortgage payments, been unable to pay bills, have had to max out credit cards and had bailiffs chasing them for late bills, all because people have not received the pension money they were due. Now, Kay Donald very sadly lost her husband, Barry, in September last year. Now, within three weeks, Kay was paid Barry's life insurance and a pension from a previous employer, but a death in service payment due from capita took nine months. Gross incompetence on Capita's part and a terrible, terrible way to treat widows of current employees.

5:22Just an awful, awful way to treat people. And I know I'm not the only one in the position. There's thousands of people in that position. It's horrific. It's really, it's slow. It's incompetent. it's not getting the money to people who really need it there must be people there who are relying on that payout death and service payout or just the general pension and they're not getting that and if they don't get that they're looking at having to sell their house they're looking at borrowing money off a family or friends they're looking at not being able to pay a funeral all the things that worry you going from well I was a couple and now I'm just a single person on my own trying to pay the bills, trying to pay the mortgage.

6:05And there must be people out there who are in the situation where they just can't pay it and they've had to sell their house or do whatever just to get by. Well, Dianne, what an awful experience for Kay after her husband Barry died. What's Capita and the Cabinet Office had to say to you about this? Well, we asked Capita for an interview, but it declined again. It also apologised again and said this improvement plan is its highest priority, adding, since December it's paid out£4.1 billion in pensions benefits and that call answer times for the most critical cases is now under 97 seconds. The Cabinet Office told us service levels since the move to Capita have been unacceptable and that it will assess the situation at the end of the month, adding it will, quote, use all available commercial levers to hold Capita to account.

6:57Thanks, Dan. Well, live now to speak to the Chair of Parliament's Public Accounts Committee, the Conservative MP Sir Geoffrey Clifton Brown. Sir Geoffrey, it seems clear Capita will miss this deadline for a return to normal levels of service, which it promised you it would do. How did you react when you heard that? Well, Paul, it's great to be back on your show, albeit on this really serious and sad subject. And my, you know, the miserations do go out to Kay on the death of her husband, but made worse. and she's by no means the only one. There are probably thousands like her at a very vulnerable time in their life.

7:35They've had to deal with all the problems that Capita have mismanaged in this scheme. And we mustn't forget that this scheme has been going on now for seven months and it's still not managed to resolve all these problems. So what I have done is I'm fed up with all these promises being made by Capita and the deadlines being broken. They had a solemn promise they would sort it out by the end of March. They had a solemn promise they would sort it out by the end of the June. And as you say, the PCS union now reckons they won't sort it out by the end of June. I have written a very harsh letter to cabinet office saying I am expecting by our joint hearing in the 8th of July, joint hearing with our other sister committee, PACAC in the House of Commons, that they will liaise with Capita and they will come up with a really hard target as to when these payments are going to be sorted out so that pensioners, like the ones we've heard today, like from Kay, can begin to plan their life.

8:36They can also decide whether they want to apply for one of these emergency loans. If it's going to be a matter of weeks, they might not. If it's going to be a matter of months, they may well want to consider applying for an emergency loan. I mean, you talk of a sort of hard deadline, but they have given you that. I mean, the chief executive looked you in the eye and said he'd do it. The contract's worth£239 million. The Cabinet Office, as we heard, promised to use what it called all available commercial levers. Should it be penalising Capita financially? Well, that's why I've written this pretty harsh letter to Cat Little, the Permanent Secretary at the Cabinet Office, just this week.

9:17Because ultimately, it's the Cabinet Office's responsibility to manage this project. If it's not going properly, she has the financial levers, which does involve or could involve deducting money from Capita. We already know they're withholding some payments from Capita. I think she's got – she and her ministry have got to get much tougher with Capita and tell them that enough is enough and there are desperate pensioners out there and they want to know when these problems are going to be sorted out. And can I just correct one thing in your program? Although the emergency helpline may deal with people in 17 seconds, the average waiting time for non-emergency categories is still 17 minutes.

9:59That's still an awful long time to be hanging on the phone waiting for an answer. It certainly is. So you're saying that you don't rule out the idea that the Cabinet Office should, in essence, fine capital or penalise it financially. Should it also be paying for the 150 staff from HMRC that are trying to help it? Well, I think we've had a reassurance from Richard Holroyd, a qualified assurance that he will pay for those. And I would be expecting Cabinet Office to make sure that he pays fully for those. They're still all there. So they're still working on this scheme. and I would expect that Capita will need to replace them with an adequate number of staff.

10:45That's another assurance we will be seeking from Capita. When they go, replace them with an adequate number of staff so that problems don't start to reoccur again. But I would be expecting Capita to re-compensate the taxpayer fully for that surge team. Sir Geoffrey Clifton-Brown, thanks. Good to have you on the programme. I'm sure you'll be on again and maybe next time it'll be better news. Thank you very much indeed. Thank you very much, Paul. Now, the Bank of England held the bank rate this week at 3.75%, but it warned inflation was still likely to rise, though the figure for May didn't change.

11:19It also warned oil prices were set to remain high because of the long-term effects of the war in the Middle East. Well, its decision was a bit of a relief after a turbulent three months for the UK economy. Where are we then with rates? Banks charge mortgage borrowers and indeed pay to save us. Adam French is head of consumer finance at the data firm MoneyFacts. Adam French, lots of changes, a busy time for you. Mortgages first, 2 million people due to remortgage, others, of course, buying their first home. How have mortgage lenders reacted? Cheers to fall savings at Whole Foods Market, home of higher ingredient standards.

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12:42AXA XL, facing into risk for a future to be imagined. This advertisement doesn't constitute an offer or solicitation, nor a description of any products or services of AXA XL.

12:56Yeah, I mean, let's not beat around the bush. The effects of the war in the Middle East have been pretty devastating for affordability for a lot of people looking to take out a mortgage this year. But there is some green shoots of good news, actually. So we saw mortgage rates peak around Easter. So a two-year fix on average is around 5.9%. The five-year fix around 5.78%. They have been very steadily falling ever since then. So we have seen a lot of lenders making very slight cuts every single week. And actually, on the announcement of the peace deal at the start of this week as to how much that realistically holds together and how quickly things free up again in the Straits of Hormuz.

13:38But certainly we've seen funding costs fall for lenders as a result. We started to see the market realistically only pricing in one base rate increase this year as opposed to two or three that was previously being forecast. And that has meant that more lenders have started to make cuts this week. So we saw big lenders like Santander and NatWest making cuts last week as well. So broadly good news for borrowers, but not as good as it would have been if this never happened in the first place. No, indeed. And you say small, frequent, small cuts. But what are we looking at now instead of 5.9 for two years and 5.78 for five years?

14:13So as at yesterday, the two year was at 5.59 and the five year was at 5.56. So that's a long way from where we were before the conflict. And the two was at 4.8. The five was just under 5 % as well. So we do have some way to go before we're back where we were, even before this conflict began. Yes, indeed. And of course, the people who are coming off five-year deals are going to find even those rates a bit of a shock, aren't they, when they have to pay them? Yeah, absolutely. I mean, you've got people who may be locked down something more like 2%, 2.5 % five years ago, going to find themselves having to find a few extra£100 a month when they come to remortgage.

14:47And let me ask you about savings, because there are far more savers than borrowers. those rates were rising a little weren't they what are you seeing now after these recent events i mean there's some good news the savings market is in rude health so we have seen savings rates uptick by around half a percentage point on average and actually some of the deals on the market right now are extremely competitive particularly if you're in a position to lock your money away for a year or two you could be getting above four and a half even pushing towards five percent on your savings account that outstrips where we're looking at inflation could go at the moment.

15:21So in terms of making a real returns on your savings, savers could be in one of the best positions they've been for a number of years. So if you've got money you can lock away, you could definitely make a tidy profit on your savings at the moment. Yes, because inflation, CPI is 2.8%, so that is quite a bit on top. But of course, Adam, just in a word, you have to move your money and seek them out, don't you? Literally a word. Absolutely. Don't sit on an easy access discount paying poor rates switch away it's so easy to do and you will make a return adam french from money facts thank you very much 1.3 billion pounds was stolen through fraud last year that's the highest amount in five years and banks are warning that artificial intelligence ai is making it easier for criminals to create fake videos that appear to be real endorsements of money making schemes.

16:09In reality, of course, as we've been reporting, they only make money for the thieves. Here's just some of the devastating cases involving the theft of hundreds of thousands of pounds that we've reported on Moneybox in the past year, starting with Sarah, who had more than£300 ,000 stolen from her in an investment scam. Earth-shattering. At that point, you realise your entire life has changed. You go through every emotion conceivable about how could I have been so stupid? Is it just me? Why had I not done something about it sooner? Where do I go from here? Just under£250 ,000. It's a very embarrassing thing to say, but yeah, I was suckered and I was groomed.

16:57You see them, you get anger, you get the if I ever find them things, but it's the feeling of shame. It was just an exchange of emails, which I've done with other people that normally lead nowhere, but this particular one showed interest, and it sort of developed from there. It's around£30 ,000. I just felt embarrassed about the whole thing. When I was running out of funds, they got me to get a loan. It was£25 ,000, went over, and he promised me all your money would be back to you. Within 15 minutes, nothing happened. I sort of broke. I have a daughter. As a father, you want to help them out as much as you can.

17:41I just haven't got anything.

17:46That was Jim and earlier Sarah, Chris and Brian explaining how they were tricked and manipulated by thieves who stole life-changing sums from them. Well, Dan's still with us. Dan, you've been going through the numbers in this fraud report. What strikes you? I think the fact that it's 4 million cases of reported fraud that make up these numbers, as you said, Paul,£1.3 billion stolen, highest of five years, and also, perhaps worst of all, that is a 4 % increase from last year, from the previous year, rather, so it's going up. And what types of fraud and scams are we talking about here? There's a lot of concern around something called authorised push payment, or APP fraud, and that's when people are persuaded, they're groomed, they're manipulated.

18:31that has surged in just one year by about a fifth to 576 million pounds. Now of that money, investment scams, we heard some of those cases just then, that is up 40 % in the space of one year. So in 2025, 221 million pounds was stolen this way. Romance fraud, purchase fraud, they're also up as well. And numbers only tell half the story. I mean, during this money box, I worked out 11 people will have become a victim of this kind of fraud. And their personal stories, as we heard, can be devastating, can't they? They are, Paul. And I've been to people's homes, I've interviewed them. And as you say, the correct word here is the impact is devastating.

19:14And a lot of people who haven't been victims might think, oh, that would never happen to me. Do you know what? That's what all these people thought until it happened to them. And remember, Paul, this is just reported fraud that we know about. We also know fraud is a hugely underreported crime for the reasons that we were just hearing about, embarrassment, guilt, shame. But honestly, Paul, you walk out of your front door and look up and down your street, chances are someone on your street has been a victim. And what's being done to tackle all this, Dan? I mean, the banks say they're doing things.

19:45And also, of course, what can people listening who do think, oh, it could never happen to me, how can they make sure it really doesn't? Right, OK, so in terms of tackling it, Paul, So good news from 2025. £300 million and above was actually reimbursed to victims of fraud because new rules that were introduced in 2024. And the aim there is to incentivise banks to increase security to stop fraud happening in the first place. Banks say they're the only ones who reimburse victims, where two-thirds of these things start online, 19 % from the telephone. So they want more from the tech and communication companies.

20:20Also, this report doesn't cover the period new anti-fraud launched earlier this year from the government, a new anti-fraud strategy. But the numbers show, Paul, just how dangerous fraud still is. Never be rushed into a payment. Speak to family and friends. Trust your bank if they contact you. If your gut feels wrong about a purported investment, it probably is. There is no such thing as easy money. Well, indeed, except, of course, Dan, for the thieves. Thanks very much. Now, despite cost of living problems and fears about the future, more than half of us expect to go abroad for our holidays this year, which is great news for the banks, because most of them add nearly 3 % on top of everything spent abroad with a debit or credit card.

21:06Moneybot's listener Simon is a regular traveller. He asks how he can avoid this cost. When it comes to paying for things, you're disappointed to be faced with either card charges at the point of purchase or charges by my credit card company and bank when paying local currency, which I have always understood to be better because of the less favorable exchange rate offered by retailers. So my question for the Moneybox team is, am I doing the right thing by still paying in the local currency? Or is it actually advisable to, in some cases, consider paying in sterling. Well, listening to Simon is Martin James.

21:50He is rip-off Britain's consumer expert. Martin James, before we answer Simon's question, I think we'd better explain these two charges. First, that charge for using a card abroad, a shade under 3%. That's right, Paul. We are covered with a plethora of charges whenever we're spending abroad. And the two main categories are there are fees, transaction fees, for every time you use your card. that can apply or sometimes don't apply. And then there are also conversion fees. This is the conversion rate that's applied when transferring your currency from one to another. Now, it's possible to even end up with four fees, with two lots of fees and two lots of conversion fees when paying abroad.

22:33So how you pay is very important. Yes, and that fee of up to 3%, it's 2.99 % generally. That's simply for using the card. It's nothing to do with converting. It's just a charge the banks make. And that's the first charge. That's the one that Simon was saying, well, can I avoid this? By doing something else. Explain this. I mean, and I must confess, it's an attractive offer sometimes in a shop or restaurant, isn't it? Would you like to pay in familiar old sterling rather than the local currency? Is that a good idea? It isn't, no. Simon's right in terms of the fact that you should always pay in the local currency because it's one less form of conversion charge that will apply.

23:12but it's the means of paying that's key here because when you pay using a traditional bank debit card then these fees, these transactional fees often apply. Now there are some other methods that will allow you to avoid those fees or reduce those significantly but unfortunately you have to do quite a bit of shopping around and research to find the best deal for you. And then to Simon's question then if you accept that pay in sterling offer Do you avoid the foreign use fee? It depends on the card and it depends within the bank. And just to confuse things, if you look at some of the big high street banks, and indeed I believe Simon had one of those, then some of them will apply fees for the basic rate bank accounts.

23:56But if you have a premium account or any other form of card where you're paying an additional fee, you can avoid them. Yes, I mean, we did a quick survey yesterday. Lloyds, NatWest and Barclaycard all told Moneybox that they will still add the fee, even if you take the pay in sterling offer. Only HSBC said it wouldn't, but it warned that the charges levied by the retailer and their bank, the things you were talking about, could actually work out more than the 2.99 % it charges. So always pay in local currency. That's still a safe rule, Martin. How do you avoid the nearly 3 % charge then itself?

24:37I would do a little bit of research. I use a couple of different variations of paying when I'm abroad. You can buy or you can take out what are known as travel debit cards, which aren't really debit cards. They sit over the top of your banker cards and they give you better conversion rates on the currency, which will also save you quite a bit of money. And they can stop or significantly reduce those fees that you pay as well. There are also specific credit cards that you can take out that are geared towards the traveller, though, of course, the interest rates there can be prohibitive. And indeed, even some of the challenger banks will give you much more reduced or fee-free transactions, but terms and conditions sadly do apply.

25:18Martin James, thanks very much. And I hope there's still time before that summer trip for you to get a debit or credit card that charges nothing for using it abroad. Holidays are to cheer you up, not the banks. Simon emailed us, of course, with that question, and you can ask your question or tell us your thoughts by emailing moneybox at bbc.co.uk or send us a voice note or message on WhatsApp 0306 783 183. We do read and listen to them all. Your next podcast to drop will be Moneybox Live. It's back with Felicity Hanna and she'll be talking about banks. As bank branches continue to close, how can we keep a relationship with our bank when we can't just pop in to see them?

26:02Remember, you can listen to that live Wednesdays at 3pm and Moneyboxes live Saturdays at noon, both on BBC Radio 4. In this podcast, the reporter was Dan Whitworth, researcher Catherine Lund, studio manager Mitchell Goodall, our editor was Rob Cave. I'm Paul Lewis and this was a BBC News Money and Work production for BBC Sounds. So, Alice Loxton, I'm here for the history. Well, Ben Henderson, I like the formality. And that's perfect because we have a lot of history to share. Why did tea become such a British obsession? How did English turn into the language we speak today? And yes, why do women's clothes still not have pockets?

26:46Well, in our new podcast, Here for the History, we're investigating how stories from the past shape everyday life today. Basically, the things we've all noticed but never stopped to question. Listen on BBC Sounds. or watch on YouTube. Just search for Here for the History.

27:27student offer a solicitation, nor a description of any products or services of XXL. This week on The Interface, millions of kids have grown up on camera with their childhoods turned into content. There's a new law in California that gives kinfluencers the right to be forgotten, and it could impact adults too. And an attack on Russian data centers started a rumor that all the evil disinformation bots had been deleted from the internet. But the truth might actually be a lot scarier. For our take, join me, Jess Maddox. And me, Thomas Germain, for The Interface. Listen on BBC.com or wherever you get your podcasts.