Labour has today ruled out compensation for almost four million women who claim they have financially suffered from changes to the state pension age.
Campaigners slammed the decision as ‘bizarre and totally unjustified’, while the Government faced a barrage of criticism from MPs, including from within Labour.
The U-turn came as a surprise to millions of women born in the 1950s who had hoped they would be in line for a payout after the Parliamentary and Health Service Ombudsman ruled in March that the Department for Work and Pensions (DWP) had failed to properly tell them about changes to the state pension age.
The Ombudsman recommended payments of up to £2,950 each, at a cost of up to £10.5bn.
But on Tuesday, Work and Pensions Secretary Liz Kendall said the Government does not believe paying a flat rate to women would be a fair or proportionate use of taxpayers’ money.
Advocates for the women say millions had their retirement plans plunged into chaos and were left out of pocket.
Hundreds of thousands are said to have already died without seeing a resolution.
Here we look at the main issues in play today.
Who are Waspi women?
The Women Against State Pension Inequality (WASPI) campaign is a group leading the fight on behalf of millions of women affected by a change to the state pension that means men and women can claim it at the same age
The Women Against State Pension Inequality (WASPI) campaign is a group leading the fight on behalf of millions of women affected by a change to the state pension that means men and women can claim it at the same age.
The 1995 Pensions Act and subsequent legislation raised the state pension age for women born on or after April 6 1950 from 60 to 65. The change was due to be phased in between 2010 and 2020, but was later sped up to be completed by 2018.
This hit women particularly hard because their increases happened both sooner than expected and in quick succession. Some 2.6million women received just five years’ notice of an extension to their pension age.
This left them forced to work much longer than expected or to retire with no state pension for that period and with not enough time to build up savings that could bridge the gap.
Waspi says that up to 3.6million women may have been affected. They agree with equalising women’s and men’s pension ages, but not the ‘unfair’ way the changes were implemented and the lack of communication to women about changes which would have a major – and in some cases devastating – impact on their future finances.
What did the Government announce today?
Work and Pensions Secretary Liz Kendall has ruled out any compensation for almost four million women who claim they have financially suffered from changes to the state pension age
On Tuesday, Work and Pensions Secretary Liz Kendall said the Government does not believe paying a flat rate to women would be a fair or proportionate use of taxpayers’ money.
The Government said it has accepted the Ombudsman’s finding of maladministration and apologised for there being a 28-month delay in writing to 1950s-born women.
But it said evidence showed only one in four people remember receiving and reading letters that they were not expecting and that the great majority of 1950s-born women did know that the state pension age was changing.
The Government said a blanket compensation scheme cannot be justified and it would be impossible to deliver a tailored compensation scheme taking into account individual circumstances that is fair, value for money and feasible, it added.
In a statement, Ms Kendall said: ‘These two facts: that most women knew the state pension age was increasing and that letters aren’t as significant as the Ombudsman says, as well as other reasons, have informed our conclusion that there should be no scheme of financial compensation to 1950s-born women, in response to the Ombudsman’s report.
‘Given the vast majority of women knew the state pension age was increasing, the Government does not believe paying a flat rate to all women at a cost of up to £10.5 billion would be a fair or proportionate use of taxpayers’ money.
‘Not least when the previous Government failed to set aside a single penny for any compensation scheme and when they left us a £22bn black hole in the public finances.’
The statement was a U-turn on Labour’s previous promises to support Waspi women, with compensation of up to £31,300 offered in its 2019 manifesto.
What were the previous findings of the Ombudsman?
The Parliamentary and Health Service Ombudsman investigated complaints that the Department of Work and Pensions has failed to provide accurate, adequate and timely information about areas of state pension reform
The Parliamentary and Health Service Ombudsman investigated complaints that, since 1995, the Department of Work and Pensions has failed to provide accurate, adequate and timely information about areas of state pension reform.
The ombudsman published stage one of its investigation in July 2021. It found failings in the way DWP communicated changes to women’s state pension age.
The DWP’s handling of the pension age changes meant some women lost opportunities to make informed decisions about their finances. It diminished their sense of personal autonomy and financial control, the ombudsman said.
In addition to paying compensation, the ombudsman made it clear the DWP should acknowledge its failings and apologise for the impact it has had on complainants and others similarly affected.
It said it has received a series of complaints relating to how the DWP communicated a variety of state pension reforms, and concerns about communication of changes to the state pension age constitute only one area of complaint.
What did the Ombudsman recommend?
The Ombudsman had previously recommended compensation running up to £35billion
The PSHO used a severity of injustice scale to determine a financial payment that it believed was appropriate and proportionate.
It believed women experienced a significant and/or lasting impact which is level four on the scale, which is between £1,000 and £2,950.
It gave this suggestion to Parliament, which was left to determine a remedy.
Calls were made for levels of compensation to be higher. Waspi chairwoman Angela Madden called for a ‘proper compensation package’.
She said: ‘The report at least finds that level four compensation is required, but politicians across party lines have previously supported level six – which would far more clearly and reasonably recognises the injustice and loss of opportunities suffered.
‘We are now looking to those who have supported us over the years to put their money where their mouth is and back us on a proper compensation package. All the parties are now in the spotlight with Waspi women watching and waiting to see how they should best use their votes in the coming general election.’
Level six compensation is £10,000 or more. With up to 3.6 million potential claimants the compensation could have run up to £35billion.
What was the reaction to the Government’s U-turn?
‘Totally unjustified’: Angela Madden, chairwoman of Women Against State Pension Inequality (Waspi) slammed today’s Government U-turn
Angela Madden, chairwoman of Women Against State Pension Inequality (Waspi) said: ‘The Government has today made an unprecedented political choice to ignore the clear recommendations of an independent watchdog which ordered ministers urgently to compensate Waspi women nine months ago.
‘This is a bizarre and totally unjustified move which will leave everyone asking what the point of an ombudsman is if ministers can simply ignore their decisions.
‘It feels like a decision that would make the likes of Boris Johnson and Donald Trump blush.’
Helen Whatley, shadow secretary for work and pensions, said: ‘I am sure that the Government’s statement today will be a huge disappointment to Waspi women, and I recognise the strength of feeling on this.
‘The decision to provide no compensation is the Government’s decision and they need to own it.
‘I am not going to let them get away with saying that this is because of a fictional black hole in the public finances.
‘The country’s financial position now is because of their political choices.’
Labour MP Brian Leishman for Alloa and Grangemouth said he was ‘appalled’ at the decision to not provide financial compensation to the Waspi women.
‘Not enough’: Independent MP Rebecca Long Bailey called on the Government to do more than just apologise to Waspi women
Independent MP Rebecca Long Bailey, who co-chairs the all-party parliamentary group (APPG) on State Pension Inequality for Women, said the Government’s apology was ‘not enough’ for Waspi women.
Ms Long Bailey said the APPG found ‘huge numbers’ of women suffered ‘significant financial hardship’.
She added: ‘Frankly, it’s unprecedented for a government to agree with the findings of an ombudsman on the one hand but to refuse to initiate redress when clear injustice has occurred.’
Liberal Democrat work and pensions spokesman Steve Darling said: ‘Today is a day of shame for the Government.
‘The new Government has turned its back on millions of pension-age women who were wronged through no fault of their own, ignoring the independent Ombudsman’s recommendations, and that is frankly disgraceful.’
Baroness Altmann, a former pensions minister, said: ‘The state pension is crucial for many of the women born in the 1950s.
‘They often had little chance to build private pensions and if they worked part-time after having children they were not even allowed to join their employer pension scheme.
‘By not receiving the state pension they were relying on, many were plunged into poverty.’
Have they tried other ways to win compensation?
In 2019, Julie Delve, 61, and Karen Glynn, 63 took the Department for Work and Pensions (DWP) to court, arguing that raising their pension age ‘unlawfully discriminated against them on the grounds of age, sex, and age and sex combined’
In 2019 two women affected by the pension changes lost a landmark High Court fight against the Government.
Two claimants – Julie Delve, 61, and Karen Glynn, 63 – had taken the Department for Work and Pensions (DWP) to court, arguing that raising their pension age ‘unlawfully discriminated against them on the grounds of age, sex, and age and sex combined’.
The pair, supported by campaign group Backto60, also claimed they were not given adequate notice in order to be able to adjust to the changes.
But Lord Justice Irwin and Mrs Justice Whipple deemed that the changes were lawful.
The ruling blocked that route to compensation after the retirement age was raised from 60 to 66. It was met by protests outside the court, with campaigners chanting ‘shame on you’.