Edinburgh woman wrongly ordered to pay back hundreds of pounds of pension due to administrative error
An Edinburgh woman has been ordered to pay back almost £2,000 of her pension which she doesn’t owe after an adminstrative error saw her put on the wrong tax code.
Fiona, who retired four years ago after nearly 40 years in the Civil Service, has been told she owes around £1,900 which is set to be taken out her usual pension payments in instalments, reducing her monthly pension by a third.
After speaking with HMRC, she learned she had been put on an incorrect tax code despite no changes to her circumstances – and according to a letter sent by HMRC last week, her pension is ‘estimated to be double of what it actually is.’
The Edinburgh resident was told issues began after Capita Pension Solutions took over the UK Civil Service Pensions Scheme in December last year, and that the HMRC had received ‘thousands of calls this week’.
Speaking to the Evening News, Fiona said: “When I phone HMRC, their immediate response was ‘oh, you're a civil servant, there's been massive issues this week and we’ve had thousands of calls this week alone off the back of recent letters being issued’.
“My circumstances have not changed, I'm a single person who worked for the civil service for about nearly 40 years and I only get one pension. I don't have a state pension either so it's a very straightforward pension calculation. But now me and many others are being sent letters stating that they receive two pensions when they are not.
“They said all we can tell you is we're very sorry but the HMRC can do nothing until Capita sorts the issues at their end. They suggested it might be a software issue.”
Capita was awarded the £239m contract to administer the UK Civil Service Pensions Scheme in November 2023 - the same year the company was targeted in a cyber attack which saw personal data including passport images and personal addresses stolen. Capita was later fined £14m for ‘failing to ensure the security of processing of personal data.’
The company officially took over the administration of the scheme on December 1, 2025.
Fiona said: “There was no formal communication to advise me that my pension had been transferred to a new company. These issues are going to affect an awful lot of people in different ways. I'm told they're not able to pay out any lump sums.
“The letters from HMRC have only just been issued but I think this is just going to grow arms and legs and it is sounding like many people will be put in very difficult financial circumstances.
“I’m going to lose around a third of pension for several months until I am reimbursed – that’s a lot of money. I'm pretty level headed and I know that eventually it will be sorted, but for others and especially people older than me, this could cause all sorts of stress.”
Fiona said one of her friends in England who planned to partially retire this month with a lump sum can no longer do so despite having applied within the allowed timeframe. She added: “None of it will get paid and he cannot retire because there are no details of him at all.”
A spokesman for Capita said: “We have been made aware of an issue regarding some information submitted to HMRC affecting a very limited number of members, and we have been working closely with HMRC to resolve this. We sincerely apologise for any inconvenience caused to our members.”
He added: “At the time of contract signature, the volume of work in progress items left by the previous provider was agreed to be 37,000. Once we took over the scheme in December, however, we discovered that the backlog we were inheriting was in fact 86,000. As a result, we have experienced several times the normal volume of member queries since launch.
“Capita has over 500 full-time employees working to deliver the Civil Service Pension Scheme, an increase of 50% on the previous provider. Since the start of December, payments of over £747m have been made. Our teams are working tirelessly to clear the backlog we inherited and resolve member queries as quickly as possible.
“Our programme of enhancements for CSPS members will continue to be rolled out over the coming months which will streamline the administration process and offer more tailored support structures to members.”
HMRC and the Cabinet Office declined to comment.