Government considering compensation for women hit by state pension age change

The Government will consider compensating thousands of women who suffered injustice over the way changes to their state pension age were communicated.

Speaking in Parliament on Thursday, Commons leader Penny Mordaunt urged the Department for Work and Pensions (DWP) to review recommendations put forward by the Parliament and Health Service Ombudsman (PHSO) in a damning report.

The document said thousands of women born in the 1950s hit by the state pension age change should be remedied, and that some should receive financial compensation.

From 1948 until 2010, the state pension age was 60 for women and 65 for men – but the 1995 Pensions Act ruled that the women’s state pension age would gradually increase from 60 to 65 between April 2010 and 2020, equalising it with men.

This meant women born between April 6 1950 and April 5 1955 would have a state pension age of between 60 and 65. Women born after that would reach the state pension age at 65, the same as men. In 2011, the increase to 65 was brought forward two years to 2018.

But the campaign group Women Against State Pension Inequality (Waspi) said as many as 3.6 million women were not made aware of the age change – and were forced to work longer with little to no warning.

Describing it as a “rare but necessary step”, the PHSO recommended that Parliament step in to work out how to compensate the women affected. It said the DWP had “clearly indicated it will refuse to comply” on its payout proposal.

It recommended a level four payout of between £1,000 and £2,950, taking into account four categories: emotional, material, physiological and bereavement.

However, it also acknowledged that not all women born in the 1950s would be affected, as some were made aware of the changes. It estimated that compensating all women born in the 1950s, even at level four, would cost between £3.5bn and £10.5bn.

Speaking in response to the report, Ms Mordaunt said: “I certainly know that the department will want to consider what is announced today with regard to Waspi women. I know this is a concern across the House, and I’m sure that the minister will want to come and update the House at the earliest opportunity - they will want time to consider what is said today, but I hope that an update can be given to colleagues before recess.”

The Prime Minister’s spokesman said: “The Government will now consider the Ombudsman’s report and respond to their recommendations formally in due course, and we will also cooperate with the parliamentary process as we have done throughout with the Ombudsman.

“More broadly, we have always been committed to supporting pensioners in a way that provides them with a sustainable retirement whilst also balancing fairness to them and taxpayers.”

Sir Keir Starmer is urging the Government to give its verdict on the report as soon as possible.

But he is yet to present a plan of his own, with Labour still considering its response.

The party is not making any promises, with a source insisting “we won’t make any unfunded spending commitments”.

In its 2019 manifesto under Jeremy Corbyn, the party described the situation as a “betrayal” and promised up to £31,300 in compensation. But Sir Keir has since wiped the slate clean, and made no such commitment himself.

Although PHSO can make recommendations, the Government is not forced to act on them.

A 2019 decision in the High Court also confirmed it cannot recommend DWP reimburses lost pensions, or that anyone should get their state pension earlier or receive more than they’re entitled to. This is because it would need a reversal of primary legislation.

The Waspi campaign group said that women have lost over £4bn, and that 272,687 have died waiting for justice. 

Campaigners leading the Waspi compensation group said level four compensation is not sufficient, with some claiming it has cost them £47,000.

They have called for level six payouts – equivalent to as much as £10,000 each.

Waspi campaign group chair, Angela Madden, said: “The DWP’s refusal to accept the clear conclusions of this five year long investigation is simply unbelievable.

“One of the affected women is dying every 13 minutes, and we just cannot afford to wait any longer.”

Ms Madden added: “Now that the PHSO findings have at last been published, all parties owe it to the women affected to make a clear and unambiguous commitment to compensation.

“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 recognise the injustice and loss of opportunities suffered.

“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.”

Peter Aldous MP, vice-chair of the State Pension Inequality for Women APPG, said: “These millions of women worked, cared for families, and supported communities all their lives.  They deserve the dignity of fast compensation.

“In line with the report submitted by the State Pension Inequality for Women APPG to the PHSO in 2022, compensation in line with category six injustice must be agreed by Parliament.

“The campaign for justice for 1950s women goes on until Parliament reaches the right conclusion.”

Labour MP John McDonnell said women feel “betrayed” by the Government.

On X, he wrote: “The PHSO report on compensation for WASPI recommends a level four amount which is between £1,000 and £2,950. Even though this is an acknowledgment of Government failures, I believe this will come as a bitter disappointment to many of these women, who will feel betrayed.”

The DWP said it would now review the findings. A spokesman said: “We will consider the Ombudsman’s report and respond in due course, having cooperated fully throughout this investigation.

“The Government has always been committed to supporting all pensioners in a sustainable way that gives them a dignified retirement whilst also being fair to them and taxpayers.

“The State Pension is the foundation of income in retirement and will remain so as we deliver a further 8.5% rise in April which will increase the state pension for 12 million pensioners by £900.”

But former pensions minister Baroness Altmann called for “swift” government intervention.

“It [the report] highlights clear failings and indicates that millions of women are owed an apology, to acknowledge the impact on their retirement plans, but does not recommend the level of compensation many WASPI women were hoping for,” she said.

“Of course, not all Waspi women deserve thousands of pounds of compensation. Even the Ombudsman says, many women did know about the increase and they stayed working. Others had private and public sector pensions they could draw on before their state pension started, but millions had no idea of the delay.

“What happens next is entirely up to Parliament and I hope there will be swift action. The first important matter is for the DWP to own up to its errors, issue an apology and ensure it has processes to avoid this happening again.”

Former pensions minister Sir Steve Webb said the Government will struggle to secure an election majority without a plan of action.

He said: “If DWP refuses to accept the Ombudsman’s recommendation and refuses to establish a redress scheme, there is no chance that this position will hold. Particularly during an Election year, the Government will struggle to secure a majority for ignoring the Ombudsman’s report.”