Civil service pensions in MELTDOWN: Rod, 70, could lose his dream home while he waits for £40,000 payout

When Rod Peers retired in November aged 70, he was eager to start this new chapter in his life by purchasing a three-bedroom property with his partner.

Knowing he would need to withdraw £40,000 from his civil service pension to afford his new home, he took all the right steps – contacting the pension scheme eight months ago and filling in all required paperwork ahead of his retirement.

But like tens of thousands of other current and former government workers languishing in an 86,000-case backlog, Rod has been left in despair as the cash he was promised and urgently needs has still not arrived.

Hopes of securing his dream home are now in jeopardy just weeks away from when the purchase is due to complete.

Rod, who lives in Devon and used to work as a manager at the Department for Work and Pensions before he retired, is far from alone.

Many civil servants have contacted Money Mail in distress over their pensions following a meltdown at one of Britain’s most lavish pension schemes.

The civil service scheme is considered gold standard because members receive generous final salary or career average salary-linked pensions, which are guaranteed until they die.

But Money Mail today reveals the extent of the chaos into which it has descended. 

Long delays in payments and an avalanche of complaints prompted a crisis statement last week from bosses of the civil service and newly installed administrator Capita to address the ‘serious issues’ affecting pension scheme members.

Pensioners tell us they have been left waiting months to receive any payment from their pensions, letters and phone calls are going unanswered or are being ignored and, in some extreme cases, staff could be forced to wait up to two years extra to receive pension money.

Henry Tapper, retirement industry veteran and chairman of pension research firm AgeWage, says: ‘The impact on those retiring is to turn what should be a lifetime reward into a frustrating end to their careers – some will suffer financial hardship. 

Capita’s management are not just giving those retiring from the civil service a bad experience, they are giving pensions a bad reputation.’

Former pensions minister and partner at consultancy LCP, Sir Steve Webb, adds: ‘People who have given their lives to public service deserve better than this.’

The deputy boss of HMRC, Angela MacDonald, has been drafted in ‘to lead oversight of an urgent recovery plan’, as Capita says it inherited a backlog of 86,000 cases from the previous contractor MyCSP in December.

Capita was appointed as administrator for the pension scheme and is therefore responsible for the nuts and bolts of running it. This includes keeping records of everyone who has saved into the scheme and paying money into people’s pension accounts.

However, frustrations are growing among those who have been locked out of their pensions.

Rod says: ‘I’m caught in the middle, still waiting for a payment. It’s causing financial hardship, health issues and is putting our house purchase at risk.’

He says he had rung the customer service line once or twice a week to no avail and had spent more than 20 hours on the phone in total – including one wait lasting five hours. He also made two formal complaints in January.

Rod and his partner, who have already sold their own separate homes ahead of plans to move in together, are considering taking a loan from her daughter to secure their new property.

Former civil servant Andrew Jones, who asked for his name to be changed, fears the chaos could make him wait an extra two years to receive part of his pension. Andrew is approaching his 65th birthday later this month with trepidation.

He says that if his paperwork isn’t processed before his birthday, one of his two civil service pensions could be delayed until he is nearly 67, reducing the income he expected to start with in retirement by around £10,000.

Andrew says: ‘Thankfully I don’t need that money, but I would rather have it.’

The delay could arise because Andrew is among the pensioners affected by the McCloud judgment, a Court of Appeal ruling in 2018 which found age discrimination in the way public sector pensions were administered.

The disadvantaged workers now have to choose whether they want to be in an old or a newer scheme, which can involve different payouts and retirement dates. 

Whether you end up better or worse off depends on your circumstances, so it is important to make the right decision.

Andrew, a retired civil servant from Somerset, wants both his pensions to start paying out this month, but he is in limbo. He says: ‘The whole situation is appalling. These individuals are messing with my pension.’

Andrew says he had farcical experiences when trying to call Capita over the past month. It took four attempts to get through on his mobile, which only allows him to wait two hours for an answer.

On his first attempt, he was told he was seventh in the queue, but two hours later he was still waiting to speak to an operator and the call was cut off. On his second attempt he moved from sixth to second in the queue over a two-hour period.

He tried for a third time, but as it was getting late, he rang off. He made his fourth attempt at 8am the following morning, and after an hour and a half of being told he was first in the queue, he got through to a staff member.

He then heard nothing more until Money Mail intervened to get vital paperwork sent to him.

Abbi Bloor, a 55-year-old charity administrator and swimming teacher from Devon, says she has also grown frustrated with the pension administrators.

She has been trying for six months to find out information about her civil service pension.

All her pension schemes wrote to her about her options as she approached her 55th birthday, except for the civil service scheme.

She wants to know how much pension income she is due and details of the lump sum she can draw, and fears that without the details, important financial decisions like paying down her mortgage will have to remain on hold.

She has been unable to get through on the phone, despite several attempts, including one four-hour wait when she reached fifth in the queue before being cut off at 6pm by a message saying the office was now closed.

Abbi says: ‘It’s shocking. They should be in touch with me by now. It’s frustrating and I don’t know what else I can do except wait for them to contact me – I’ve sent letters, emailed and called. I don’t know what my pension is.’

In response to the service meltdown, civil service chief operating officer Catherine Little and Capita’s chief executive Adolfo Hernandez issued a joint statement last week, which said: ‘This is not the service members deserve.

‘Capita and the Cabinet Office are deeply sorry for the worry, frustration and distress this has caused, particularly for those dealing with bereavement or ill health.’

They admitted to a string of difficulties, including problems logging into the portal, incomplete pension details, long waits on customer service calls and delays to pension quotes and payments. They said: ‘In some cases, this has caused financial hardship.

‘When Capita took over administration in December 2025 they inherited a backlog of 86,000 cases from the previous administrator, a significant proportion of which were already overdue. This led to higher than expected volumes of calls and complex queries, which created further issues.’

The Cabinet Office, which is the Prime Minister’s administrative nerve centre and meant to ‘ensure the effective running of government’, according to its website, said it had asked Angela MacDonald to oversee the recovery plan.

In addition to receiving help from HMRC, which has endured a barrage of criticism over the years for its own customer service failings, Capita has agreed to prioritise urgent cases such as bereavement, ill-health retirements and hardship situations.

Capita is also deploying a ‘surge team’ of 150 extra staff, bringing the workforce to more than 650. Government departments are being asked to offer support in hardship cases where staff have retired in the past 12 months, while Capita deals with the rest. 

The statement says Capita expects to restore service levels for urgent cases by the end of February.

A Capita spokesman says of Mr Jones’s case: ‘We are very sorry for the delay this member has experienced and are actively working to resolve the matter.’

He adds: ‘Our team are progressing Mr Peers’s case and looking into Mrs Bloor’s query. They will be in touch directly with the members. 

‘We’re working to resolve these queries as quickly as possible as we continue to address the backlog we inherited.’

A spokesman for MyCSP says: ‘MyCSP completed a comprehensive handover of the pension scheme with the new provider which was overseen by the Cabinet Office. 

Over the course of its tenure administering the scheme, MyCSP consistently met the service levels set by the Cabinet Office as confirmed in the National Audit Office’s assessment of performance.’