UK pension administration errors leave thousands underpaid and retirees in hardship

An administrative mistake by HM Revenue and Customs has left up to 800,000 self‑employed Britons with gaps in their National Insurance records, potentially costing them thousands of pounds in state pension entitlement. Money Saving Expert estimates that around 160,000 of those affected are already at or near state‑pension age.

At the same time, the government's decision to outsource the civil service pension scheme to Capita has caused significant delays for thousands of retirees and their families. About 17,000 relatives of deceased claimants report financial hardship after payments were postponed for up to a year. Cases highlighted include a 98‑year‑old who needed emergency support and a widow awaiting a lump‑sum death‑in‑service benefit.

The Cabinet Office has said the service levels are "unacceptable" and is considering bringing the scheme back in‑house.