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UK's Capita hit with new review over troubled pension scheme contract

Published by Global Banking & Finance Review

Posted on October 2, 2026

1 min read

· Last updated: October 2, 2026

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Capita Faces Fresh UK Review Over Performance in Troubled Pension Scheme

Capita's Performance and Government Scrutiny

Background of the Civil Service Pension Scheme

Oct 2 (Reuters) - Britain's Capita has been hit with a fresh government review over its handling of the troubled civil service pension scheme, with the outsourcing firm saying on Friday that its performance remains below expected standards. 

Mounting Pressure on Capita

The probe adds to mounting pressure on Capita over a contract that has become a flashpoint for broader concerns about the outsourcing of critical public services to the private sector.

National Audit Office's Role

The National Audit Office said it would undertake a review of the scheme's administration, building on an earlier investigation from June 2025 and forming part of accountability arrangements that apply to major public service contracts.

Capita's Response and Improvement Measures

Capita said it had made "good operational progress" over the last two months across priority areas of the scheme since its half-year results in August and was implementing further automation and stronger governance to improve service. 

(Reporting by Yamini Kalia in Bengaluru; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)

Key Takeaways

  • A government-appointed independent audit and a Remedial Adviser (Grant Thornton) are now being deployed at Capita’s expense to assess systems, IT, compliance and operational governance. (gov.uk)
  • Capita missed key recovery deadlines—most notably failing to fully restore services by end‑June—and while it hit self‑set targets by 1 September in workable cases, overall performance remains unacceptable. (questions-statements.parliament.uk)
  • Capita acknowledged the firm remains far from service expectations; the failure is now projected to cost the group £25–40 m in operating profit and £35–50 m in free cash flow, while broader contract scrutiny and possible in‑housing strategies loom. (capita.com)

References

Frequently Asked Questions

Why is Capita under a new pension scheme review?
Capita is under review due to ongoing concerns about its handling and performance regarding the civil service pension scheme.
Who is conducting the review of Capita's pension scheme contract?
The National Audit Office is conducting the review, expanding on a previous investigation from June 2025.
What issues have arisen with Capita's management of the scheme?
Capita's performance has remained below expected standards, leading to mounting pressure and government scrutiny.
What steps has Capita taken to address these concerns?
Capita has implemented further automation and stronger governance, making operational progress to improve service.

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