Capita has issued an apology after a government minister and MPs condemned its 'dreadful' running of the civil service pension scheme.

In a scandalous service meltdown reported by This is Money and Money Mail, pensioners and bereaved families have faced hardship after being deprived of incomes for months.

The outsourcing giant broke its promise to fix the problems by June 30, and there is still a backlog of nearly 11,000 cases, Paymaster General Nick Thomas-Symonds told the House of Commons yesterday.

He said that includes 4,100 bereavement cases on which Capita could take action, adding: 'These are the most harrowing stories, affecting devastated scheme members and grieving families.'

Capita, which took over the civil service pension scheme from previous administrator MyCSP last December, responded today: 'We continue to work at pace to resolve the operational issues in collaboration with the Cabinet Office.