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Mon, 19 Oct 2026

Mon, 19 Oct 2026 Bereaved families could face 'unjust' tax bill after civil service pension delays

The chairman of Parliament's Public Accounts Committee says families should not be taxed through no fault of their own.

* HMRC rules state lump sum payments must be made within two years to remain tax-free
* Conservative MP Sir Geoffrey Clifton-Brown warns that affected families could face an "unjust" tax bill
* Existing avenues for compensation, such as the Pensions Ombudsman, may not resolve complaints quickly enough
* 1,643 outstanding cases of bereavement or death in service are more than 100 days old
* Capita, the outsourcing firm administering the Civil Service Pension scheme, inherited a backlog of over 86,000 cases
* Problems persist despite a two-year transition period to prepare for takeover
* Retired civil servants and bereaved families left waiting months for pension payments
* Some facing difficulty paying bills, with others needing money just to survive