Bereaved civil service families could face ‘unjust’ tax bills due to pension scheme delays

MPs say ‘chaos’ at Capita-run scheme could mean some claims miss tax-free time limit on lump sum payments

Bereaved families could face “unconscionable” tax bills because of “chaos” in the civil service pension scheme, the government has been warned.

Some lump sum pension payments to families are only tax-free if made within two years of a scheme being told of the member’s death.