---
title: "Capita Expects to Lose Up to 40 Million Pounds Over a Pension Scheme Failure"
description: "The UK outsourcing company Capita says a botched takeover of the civil service pension scheme will cost it as much as 40 million pounds this year. Thousands of members have faced delayed payments and quotes, and the government, which has withheld money and threatened to bring the work back in-house, calls the failures unacceptable."
category: "Business"
category_url: https://newsparlor.com/category/business
author: "Megan Chen"
published: 2026-07-09T19:52:00.000Z
updated: 2026-07-09T19:52:00.000Z
canonical: https://newsparlor.com/article/capita-expects-to-lose-up-to-40-million-pounds-over-a-pension-scheme-failure
tags: ["capita", "pensions", "outsourcing", "united-kingdom", "civil-service"]
---
# Capita Expects to Lose Up to 40 Million Pounds Over a Pension Scheme Failure

The UK outsourcing company Capita says a botched takeover of the civil service pension scheme will cost it as much as 40 million pounds this year. Thousands of members have faced delayed payments and quotes, and the government, which has withheld money and threatened to bring the work back in-house, calls the failures unacceptable.

Capita, one of Britain's biggest outsourcing companies, said it expects to lose up to 40 million pounds this year because of problems with its administration of the civil service pension scheme, a failure that has left many members waiting for payments and quotes and drawn sharp criticism from the government.

## The numbers

The company told investors that the trouble would cut its underlying operating profit by somewhere between 25 million and 40 million pounds in 2026, with a larger hit to its cash flow as it pays to put things right, [the Guardian reported](https://www.theguardian.com/business/2026/jul/09/capita-expects-to-lose-up-to-40m-over-pension-scheme-fiasco). The government has already held back around 10 million pounds in payments over Capita's performance and has said it will seek to recover the cost of fixing the scheme.

## What went wrong

Capita took over running the scheme, which covers a large number of current and former civil servants, in late 2025. Within months, the service ran into serious delays, leaving thousands of people waiting on retirement calculations and payments, including some retirees with little other income, [The Register reported](https://www.theregister.com/public-sector/2026/06/16/capita-is-about-to-sail-past-deadline-to-fix-civil-service-pensions-scheme/). The company then missed a government deadline to bring the service back up to the required standard. The precise technical causes have not been fully spelled out, but the transition to Capita's systems appears to have struggled with the scale and complexity of the work.

## The reaction

Capita's chief executive acknowledged that the service had "not been good enough" and said fixing it was the company's top priority, while stressing that the rest of the business was performing well. The government has been blunter. A Cabinet Office minister criticized the failures and indicated ministers would bring the administration back in-house immediately if that were practical, a sign of how far confidence has fallen. For now, the plan is to press Capita to fix the problems while penalizing it financially for the shortfall.

## The bigger picture

The episode is another blow for Capita, which has struggled with a series of large public-sector contracts, and it feeds a wider debate in Britain about how much the state should rely on big outsourcing firms to run essential services. Pensions are an especially sensitive area: for the people affected, a delayed payment is not an abstraction but a missed bill or a squeezed month. The financial hit to Capita is significant, but the more lasting damage may be to trust, both in the company and in the model of contracting out the machinery on which people's retirements depend.

## Sources

- [Capita expects to lose up to £40m over a pension scheme fiasco](https://www.theguardian.com/business/2026/jul/09/capita-expects-to-lose-up-to-40m-over-pension-scheme-fiasco)
- [Capita is about to sail past a deadline to fix the civil service pensions scheme](https://www.theregister.com/public-sector/2026/06/16/capita-is-about-to-sail-past-deadline-to-fix-civil-service-pensions-scheme/)