- Work and Pensions Secretary Liz Kendall has ruled out a financial compensation scheme of any kind for WASPI women in a government response to Parliament and Health Ombudsman’s (PHSO) report published earlier this year
- The final PHSO report concluded the DWP was guilty of maladministration in relation to increases in the state pension age for women
- The Ombudsman recommended ‘Level 4’ compensation of £1,000 to £2,950 per person affected
- In its response, the government claimed that 73% of 1950s-born women knew that the state pension age was changing in 2004, rising to 90% by 2006
- Potential redress scheme labelled ‘neither fair nor feasible’ to the taxpayer
- Compensation would have exceeded £9.7bn annual cost of running the DWP, according to government
Danni Hewson, head of financial analysis at AJ Bell, comments:
“After months of deliberation and studiously failing to outline its position clearly during the general election campaign, the Labour government has decided not to deliver a financial compensation scheme of any kind for women affected by changes to the state pension age in the 2010s.
“Labour inherited the headache of whether it could implement the Ombudsman’s recommendations, something which always looked unlikely given the state of the public finances. Adding to the fiscal ‘black hole’ we’ve heard so much about would have meant more difficult decisions for the chancellor.
“It will be a blow to those women who had to wait longer to receive their state pension than they were expecting, with a limited amount of time to try and reposition their finances to cope with the change.
“But the government was under no obligation to pay up and the Ombudsman’s recommendation related to maladministration rather than the fairness of the decision to equalise the state pension for men and women.
“The introduction of automatic enrolment means more people have workplace pensions, so fewer are relying solely on the state pension alone to fund their retirement. But there is still a huge gender pension gap, and too many women are currently not saving enough for retirement. Many will be unaware whether they are on track to have what they think they’ll need for their desired standard of living in retirement.”
Background
Today, men and women in the UK have the same state pension age of 66. This has not always been the case, however.
Prior to 2010, women received their state pension from age 60, while men had to wait until age 65. The 1995 Pensions Act first put forward proposals to increase women’s state pension age to 65 – bringing it in line with men – between 2010 and 2020.
The 2011 Pensions Act accelerated this timetable, meaning the state pension ages of men and women were equalised at age 65 in 2018 before increasing to age 66 by 2020. Plans are in place to increase the state pension age to 67 by 2028 and 68 by 2046.
Campaigners have long argued the changes introduced under the 1995 and 2011 Pensions Acts were unfair to women born in the 1950s, with some forced to wait six years longer than they previously expected to receive their state pension. One of the central charges was that the Department for Work and Pensions (DWP) failed to adequately notify affected women so they could adjust their retirement plans.
This case was considered by the Parliamentary and Health Service Ombudsman (PHSO) over a number of years. The Ombudsman has been investigating complaints that, since 1995, the DWP had failed to provide ‘accurate, adequate and timely information about changes to the state pension age for women’.
The full Ombudsman report (Women's State Pension age: our findings on injustice and associated issues (ombudsman.org.uk) was published March 2024.
