UK government changes pension tax rules for bereaved families after delays

The UK government has changed tax rules so that lump sum civil service pension payments will no longer become taxable solely because more than two years has passed since notification of a death. The change follows persistent payment delays, with outsourcing firm Capita inheriting a backlog of over 120,000 cases after taking over the Civil Service Pension scheme in December 2025. Retired civil servant Rob Wassell, who waited over two years for a payment that was then taxed at 45 percent, said the change means others will not face the same unfair financial penalty.