About 74,000 pension cases at the Civil Service Pension Scheme will have their McCloud remedy delayed past 31 March 2027, the permanent secretary to the Cabinet Office, Cat Little, has said, as issues at scheme administrator Capita continue. 

The deadline for fixing age discrimination in public sector schemes had been pushed back from March 2025 to March next year, according to the Public and Commercial Services Union, but Capita will now not be able to meet this, Little confirmed in an email to the chairs of the Public Accounts Committee and the Public Administration and Constitutional Affairs Committee sent on 15 September. 

The senior civil servant wrote that about 74,000 are affected; the PCS union puts the figure at 93,000, including 20,000 deferred members. In total, there were 130,000 cases, of which 44% have received a remedy statement.

Little said the ‘discovery project’ for the McCloud remedy “experienced slippage” because of resourcing and was only completed in June instead of December 2025.

The discovery showed that “a combination of factors, including the high technical complexity of the remaining cases, bespoke calculation builds, and required data cleansing, means the previously targeted delivery date is no longer achievable”, she wrote.  

“We are currently assessing options and validating Capita’s proposed delivery plan. As part of our wider communications, we will communicate a clear, revised timeline specific to impacted cohorts once technical builds are verified and timescales have been formally confirmed and agreed with key stakeholders,” she added.

The setback comes on top of existing severe issues with the administration of the pension scheme, which was handed from MyCSP to Capita in December last year. A large backlog of cases has meant many payments were delayed by months, forcing some former civil servants and their families to make use of an emergency loan scheme that had to be put in place, providing interest free loans of up to £10,000 to those affected by the delays.  

Capita has said that by 1 September, it had addressed all “workable” cases in the system as at 30 June and committed to covering workable cases receveived after that date by 30 September.  

However, Little said this was not enough: “While this step is noted, I have been clear with Capita’s leadership that meeting a milestone on workable stock alone is not sufficient progress and does not constitute full service recovery. Overall performance remains unacceptable.” 

This is despite Capita continuing to make use of a 'surge team' made up of civil servants. The firm has not said if and when it will reimburse taxpayers for this.

The PCS union said it is regularly contacted by retired members seeking information about when their pensions will be corrected.  

“These people are waiting for legally required corrections to their pensions, yet Capita has still not begun processing the outstanding cases. We cannot even give members reliable information about when their pensions will be corrected,” said general secretary Fran Heathcote.  

“Capita’s mess continues to pile up at the expense of members. I don’t know what more the government needs to see before it finally says enough is enough,” she added.  

The Cabinet Office has so far withheld £9.9m of payments and required Capita to hire Grant Thornton to produce a report about the problems at the CSPS, expected later this month.  

Little also said that “work is actively continuing across government on shaping a long-term strategy to bring the administration of the pension scheme back in-house".  

In April, the Pensions Ombudsman said that it is preparing “significant determinations” on McCloud and public sector schemes as it now expects these schemes to have progressed their implementation of the remedy. 

However, while the delays are continuing, there is yet another problem on the horizon. Families of those who died before reaching age 75 may be due lump sums from the scheme, but the ongoing delays mean they could face a tax bill. HM Revenue and Customs levies income tax on death benefit lump sums that are not made within two years.  

Earlier this week, PAC chair Sir Geoffrey Clifton-Brown wrote to Cabinet minister Louise Haigh demanding that she clarify the tax position of bereaved families in regard to CSPS.

“You know, as do tens of thousands of proud civil service families, that the chaos currently engulfing the Civil Service Pension Scheme means that the likelihood of death benefit payments being made within two years is slim,” he said, adding that “it is unconscionable” that the families of civil servants could potentially face such a financial penalty.