Retired civil servants who have been left struggling because of severe delays to their pension payments can now apply for interest‑free emergency loans of up to £10,000, ministers have confirmed.
The move comes after thousands of former staff reported lengthy waits for money owed to them following a change in the administration of the Civil Service Pension Scheme.
During a parliamentary hearing, Cabinet Office Minister Nick Thomas‑Symonds condemned the situation, telling MPs on the Public Administration and Constitutional Affairs Committee that the delays were “completely and utterly unacceptable”.
The problems began after outsourcing firm Capita took over responsibility for the scheme at the start of December, with around 8,500 people experiencing issues since the handover.
Catherine Little, the civil service chief operating officer, outlined the emergency loan arrangements to MPs.
She explained that most loans will be capped at £5,000, while the higher £10,000 limit will apply only in exceptional cases.
Individual government departments will oversee applications, and ministers say the support is intended for pensioners facing immediate financial difficulty.
The consequences of the delays have been severe for many. Sandra Jackson, 59, from Wiltshire, who left the civil service in March 2025 due to ill health, said she had expected her pension to begin in November but received nothing after Capita took over.
Thousands affected after Capita takeover triggered payment backlogs
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GETTYDescribing the experience as “hell”, she said she had been forced to borrow money from her mother to cover basic costs, but that help has now run out.
“This month we’re just struggling alone,” she said.
Similar accounts have emerged from other former civil servants.
Anthony Price, 58, from St Helens, who left the prison service on health grounds in June, said he is still waiting for an agreed compensation payment and spent more than four hours on hold trying to reach Capita.
Capita has admitted that the backlog it inherited was far larger than expected
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He has relied on relatives to cover rent and bills and described the situation as humiliating, adding that “Christmas and New Year were cancelled”.
Capita has admitted that the backlog it inherited was far larger than expected.
The company said it discovered 86,000 outstanding cases after taking over the contract, compared with the 37,000 it had anticipated.
In a joint statement with the Cabinet Office, Capita apologised for the “worry, frustration and distress” caused, particularly for those dealing with bereavement or ill health.
Officials say the most urgent cases, those involving bereavement, serious illness or acute financial hardship, will be prioritised, with ministers expecting them to be resolved by the end of February.
Capita has also increased staffing levels in an effort to reduce the backlog, recruiting more than 150 additional employees and bringing the total workforce on the scheme to over 650.
Trade unions continue to push for further action.
The PCS union, which represents civil servants, is calling for a compensation scheme to cover interest on late payments and additional costs incurred because of the delays.
The union is also urging ministers to return the pension scheme to public sector control.
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General secretary Fran Heathcote said the situation is causing “serious financial and emotional hardship” for people who have contributed to their pensions throughout their working lives, insisting that pensioners should not be left waiting months for money they are legally entitled to.
The union is also urging ministers to return the pension scheme to public sector control.
Capita secured the seven‑year, £239million contract to administer the scheme, taking over from MyCSP at the end of November 2025.
The Public Accounts Committee had already raised concerns about the transition, warning in October that Capita might not be fully prepared to assume control by December.
Ministers say efforts are continuing to stabilise pension payments and restore confidence in the system.