Millions of 'Waspi' women 'owed' huge compensation payouts after government's state pension age blunder

21 March 2024, 12:58 | Updated: 21 March 2024, 14:12

Millions of women adversely affected by the sudden rise in the state pension age are "owed" compensation, a report by a parliamentary ombudsman has found.

The long-awaited report into the scandal concluded the government had failed to tell the women about crucial changes to the state pension age.

Criticising the move by the Department for Work and Pensions (DWP), the report by the Parliamentary and Health Service Ombudsman (PHSO) suggests that millions of women affected by the pension scandal should be compensated.

The payout could see the government facing a bill of nearly £8billion.

Legislation introduced in 1995 raised the state pension age from 60 to 65 between 2010 and 2020 in order to bring it in line with that of men.

Women born in the 1950s were adversely affected, with the Pensions Act of 2011 accelerating the shift so that the change was completed by November 2018.

Around 2.6 million women are estimated to have been affected, the report suggests.

The campaign group fighting the rise, known as Women Against State Pension Inequality or WASPI, has spent years battling the government, claiming they were not adequately informed about changes.

Baroness Altmann, the former pensions minister, described the report's findings as “damning”.

"It 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.

“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. Nor will it remedy the distress, anger and anxiety for women born during the 1950s," she told The Telegraph.

The ombudsman has now requested the Commons intervene and "act swiftly" in order to establish a compensation scheme.

Initial suggestions hint that sums paid to those affected could range from £1,000 to £2,950 per person.

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If accurate and those entitled to compensation received the upper end of that figure, the government could face a bill of almost £7.7bn.

The report added that the DWP has “clearly indicated that it will refuse to comply”, with the findings calling on Parliament to intervene as a result.

Following the findings, a DWP spokesperson 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."

The WASPI group claim the shift was handled unfairly, with some women having to wait an additional six years until they could retire due to the state pension age then being increased to 66.

The watchdog today recommended that the Government apologises to the women following the findings and pays compensation "owed" to the women.

Responding to a report from the Parliamentary and Health Service Ombudsman (PHSO), former shadow chancellor of the Exchequer, John McDonnell, said: “The PHSO report on compensation for Waspi recommends a Level 4 amount which is between £1000 & £2950.

“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.”

In 2019, Labour pledged to compensate some 3 million women thought to be caught up in the pension trap.

At the time, the party estimated the the promise would cost around £58 billion over five years, with individual payments averaging £15,380 running to a maximum of £31,300.