Wealthy Waspis should be barred from compensation

Given the difficulty of assessing individual cases, the ombudsman suggests “blanket” compensation for all  women born in the 1950s may be needed.

As the ombudsman helpfully points out, the total cost to taxpayers of a blanket pay-out for all 3.5 million women born in the 1950s would be £3.5bn to £10.5bn.

Rather than putting its recommendation to the Government, the ombudsman is putting it directly to Parliament.

Given all the other pressures on the public purse, £3.5bn to £10.5bn is just a non-starter. How can the Government – weeks after a tight Budget – justify spending this, especially when most of the 3.5 million proposed recipients knew full-well their state pension age was increasing? Doing so would just be handing them all an unfair windfall.

If the Government wants to follow the ombudsman’s recommendation – which it is under no obligation to do – it must have a cheaper and more targeted approach.

The maximum paid should be at the lowest end of £1,000 to £2,950 per eligible person, with a sliding scale, so those with a higher increase in state pension age receive more. And, very importantly, any payment should be means-tested, to exclude the (many) better-off women born in the 1950s, including several MPs, and even Theresa May, the former Prime Minister.

The Government should also explain why a woman born in December 1959 should receive compensation when her classmate, born in January 1960 would get nothing.

The ombudsman’s recommendation is also a poison chalice for Labour party. Signing-up to paying £3.5bn to £10.5bn wouldn’t help Rachel Reeves to balance the books, if she became Labour chancellor after the next election.

Over the last few years, dozens of MPs and would-be MPs have jumped on the Waspi bandwagon, with umpteen Parliamentary debates, but no worked out-solutions. Now, however, the looming election may concentrate the minds of MPs and reduce their virtue-signalling.

Without question, it was right to increase the state pension age for women, in line with men, as set out in the 1995 Pensions Act, passed by a Conservative government.

And the increase wasn’t an overnight thing. It didn’t start until 2010, 15 years after legislation was passed, nor was it a cliff edge – there were transitional arrangements from 2010 to 2018, so the increase was less for older women born earlier in the 1950s.

It was also right for the state pension age for both women and men to then rise to 66, with further increases to 67 and 68, reflecting increases in underlying life expectancy, as set out in the 2007 Pensions Act. This was passed by the Labour government showing it wasn’t a party political issue.

But the 2011 Pensions Act, to accelerate the timetable for both state pension age equalisation and the increase to age 66 for both sexes, was peevish and muddled.

The legal case has already been tested in court with the Appeal Court chucking-out claims of discrimination in 2020.

The many campaigners who say they want “full compensation” up to £50,000, will not be happy with even a £2,950 maximum.

But talk about “losing £50,000” ignores the fact that equalising the state pension age was one of the things that allowed the state pension to be increased significantly for those retiring after 2016 – a major step towards reducing pensioner poverty.