Thousands of women hit by pension age rise must be compensated, report says

Thousands of women should be compensated after being left in the dark because of government failings over changes to the state pension age, a damning report has found.

The Parliamentary and Health Service Ombudsman (PHSO) criticised the department for work and pensions (DWP)‘s handling of the changes and said it had refused to acknowledge its failings nor put things right for those affected.

But, despite the clear message that the government should issue compensation, the ombudsman said the department had indicated it would not comply with the recommendation, a stance which it deemed as “unacceptable”.

As a result, the PHSO said it was taking the “rare but necessary step” of asking parliament to intervene. The government is under no obligation to follow the recommendations and No 10 made no commitment to paying compensation after the report was released.

The watchdog’s 100-page report detailed how women had suffered stress and anxiety, and had been forced to “deplete” their savings, due to the government’s mishandling of the changes. Campaigners claim millions of women born in the 1950s had their retirement plans “plunged into chaos”, with many thousands of pounds out of pocket.

They have called for around £10,000 compensation for each person affected but the report instead recommended payouts of between £1,000 and £2,950, which would cost between £3.5bn and £10.5bn overall.

PHSO chief executive Rebecca Hilsenrath said: “The UK’s national ombudsman has made a finding of failings by DWP in this case, and has ruled that the women affected are owed compensation.

“DWP has clearly indicated that it will refuse to comply. This is unacceptable. The department must do the right thing and it must be held to account for failure to do so.

“Complainants should not have to wait and see whether DWP will take action to rectify its failings.”

Campaigners have long fought for justice for women who they say have lost out due to the change in pension age and need compensation after their retirement plans were plunged into chaos.

The 1995 Pensions Act and subsequent legislation raised the state pension age for women born on or after April 6 1950.

But many women say they weren’t properly informed about the changes, leading to stress, anxiety and vast losses of money. Some say they had to use foodbanks or sell their houses to survive.

The Women Against State Pension Inequality (WASPI) group have claimed that the injustice may have affected more than 3 million women, and estimated that more than 250,000 have died before receiving compensation.

After the report was published, Women Against State Pension Inequality (Waspi) chairwoman Angela Madden called for a “proper compensation package” for those who had been affected, while

She was backed by senior Tory who has backed the campaigners said it should be at least £10,000. Peter Aldous, vice-chairman of the State Pension Inequality for Women APPG (All-Party Parliamentary Group), said: “These millions of women worked, cared for families, and supported communities all their lives. They deserve the dignity of fast compensation.”

His words were echoed by Baroness Altmann, a former pensions minister, who wrote in the Telegraph: “Of course, an apology would be a start, but will not pay the bills for those plunged into poverty as a result of not knowing their state pension age had been increased”.

She called for parliament to decide “what, if any, blanket compensation is offered and whether there will be a scheme that those worst affected can claim from on a case by case basis”.

Fellow former pensions minister Steve Webb also urged parliament to act: “There is no point parliament having an ombudsman if the government ignores its carefully considered recommendations,” he said.

While the consideration of any “direct financial loss” as a result of the change in the state pension age was not in the ombudsman’s remit, Ms Hilsenrath told Radio 4’s World At One that it had found that the women had experienced an “indirect financial loss” as a result of the “poor communication” of the government.

She said: “We were looking at the impact of poor communication. And what we found was it resulted in a lack of financial autonomy, a lack of the ability to make informed decisions about people’s plans for their retirement”.

The ombudsman report mentioned the case study of “Ms U”, who had not been informed by the government that she would claim her state pension six years later than previously thought.

The revelation meant she had to reduce her outgoings by £5,000 per year, including stopping socialising with friends.

The report says: “Ms U told us that since finding out her state pension age had changed, she and her partner have done all they can to reduce their spending and increase their savings to offset the loss of the state pension they had expected to get at 60.

“This has included spending economically on food and freezing meals, buying second-hand clothing, stopping leisure activities and socialising with friends, not taking holidays or celebrating key life events, and not getting a new pet.”

Another woman, “Ms I” told the ombudsman that her savings had been “depleted” and has grappled with a “great deal of stress” that caused her physical symptoms including chest pains.

Many of the other women interviewed said the ordeal had caused them to lose sleep and put great strain on their relationships.

The report added: “She said they have to budget constantly, which is stressful. She told us the ‘stress and anxiety’ of the situation is ‘enormous’. She feels her and her partner’s choices have been ‘denied’ and their social life has been affected.”

The ombudsman investigated complaints that, since 1995, DWP has failed to provide accurate, adequate and timely information about areas of state pension reform.

The ombudsman said the DWP had failed to provide “accurate, adequate and timely information” to those affected by the state pension age changes and had failed to “offer any apology or explanation for its failings and has indicated it will not compensate women affected by its failure.”

It added that DWP’s “handling of the changes” meant “some women lost opportunities to make informed decisions about their finances. It diminished their sense of personal autonomy and financial control,” it said.

Ms Hilsenrath added: “Given the significant concerns we have that it will fail to act on our findings, and given the need to make things right for the affected women as soon as possible, we have proactively asked Parliament to intervene and hold the department to account.

“Parliament now needs to act swiftly, and make sure a compensation scheme is established. We think this will provide women with the quickest route to remedy.”

The ombudsman has been investigating the issue for five years with the first stage, published in 2021, saying the government was slow in informing women how they would be affected by the change.

Labour MP Rebecca Long Bailey, fellow vice-chairwoman of the APPG, called on the government to “right this historic wrong” and “go beyond the recommendations of the Parliamentary and Health Service Ombudsman and deliver fair compensation to these women as a matter of urgency.”

The ball is firmly in Parliament’s court to deliver justice for women affected by the state pension age change, a leading campaigner has said.

Women Against State Pension Inequality (Waspi) chairwoman Angela Madden called for a “proper compensation package” for those who had been affected over the years.

She said: “The DWP’s refusal to accept the clear conclusions of this five-year-long investigation is simply unbelievable.

“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 ombudsman has put the ball firmly in Parliament’s court and it is now for MPs to do justice to all the 3.6 million women affected.

Responding to the report, Liberal Democrat Chief Whip Wendy Chamberlain MP called the WASPI women “courageous” and said they support their call for compensation: “These courageous women, who have tirelessly campaigned for justice after being left out of pocket, deserve our admiration for their persistence.”

She added: “Liberal Democrats have long supported WASPI in their campaign and it is now up to this Conservative Government to come forward with a plan to get these women the compensation they are owed.”

Leader of the house of commons Penny Mordaunt has suggested that work and pensions minister Mel Stride is likely to address the ombudsman’s recommendations in parliament before the Easter break.