Indian IT services giant takes UK teachers’ pensions contract from Capita

The Department for Education has outsourced the management of over two million teachers’ pensions to Tata Consultancy Services (TCS) in a 10-year contract that will see the scheme administration digitally transformed.

TCS will run the Teachers’ Pension Scheme, the largest public sector scheme of its type in the UK, bolstering its growing pensions and UK public sector businesses.

The India-headquartered IT services giant won the contract from Capita, which had run the service for over 20 years. In 2021, Capita won a contract extension with the Department for Education, worth £60m over four years.

TCS, India’s biggest IT supplier, will use its experience to create a digital-first, self-service pension experience, which will enable account access for pension members at any time and give them personalised insights to help them make informed decisions.

Vivekanand Ramgopal, president of banking, financial services and insurance at TCS, said: “Enhanced customer experience has been the cornerstone of our platform’s value proposition to clients in the UK pensions industry. We will continue to strategically invest in our platform and pursue our aspiration to be the preferred growth and transformation partner to life and pensions companies in the UK.”

As well as significant UK IT resources, TCS has a UK-regulated subsidiary, Diligenta, which specialises in the provision of business process outsourcing services for the UK life and pensions industry.

The deal with the Department for Education is a significant UK public sector win for TCS. The sector has been difficult to break for Indian IT services firms, despite being huge players in the UK private sector. But TCS has begun to build a good public sector customer base in the UK. Last year, it won a contract with the UK’s Financial Ombudsman Service to build key systems in the dispute resolution service’s digital transformation. At the time, Amit Kapur, UK head at TCS, said the deal “strengthened our collaboration in the UK public sector financial services”.

According to Tussell, which analyses government spending data, TCS made just under £31m in sales to the UK public sector in 2017, and this figure increased to £52m by 2019, before the pandemic slowed things down. There is huge potential for growth in the UK public sector for TCS and other Indian services firms.