"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 £10.5bn would be fair or proportionate to taxpayers."
- Work and pensions secretary, Liz Kendall
The government has today announced that there will be no financial compensation for WASPI women.
The WASPI - Women Against State Pension Inequality - campaign centres around the pension age of women born between 1954 and 1960, who were affected by the 1995 Pensions Act which increased women's state pension age from 60 to 66, in line with men.
The Parliamentary and Health Service Ombudsman (PHSO) investigated complaints from women born in the 1950s that the Department for Work and Pensions (DWP) failed to provide them with accurate, adequate and timely information about changes to the state pension age and the number of qualifying years needed to claim the full rate of the new state pension.
The report says DWP failed to take adequate account of the need for targeted and individually tailored information based on research when making decisions about next steps in August 2005. Second, DWP did not act promptly enough on a November 2006 proposal to write directly to affected women about changes to state pension age, which was not progressed until December 2007.
When combined these led to a 28-month delay in beginning the direct mailing exercise to women affected by the 1995 Pensions Act.
The PHSO would have recommended compensation between £1,000 and £2,950 for all six sample complainants; and recommended that DWP should provide a remedy for other 1950s-born women who have suffered injustice because of the maladministration found.
However, the government has decided against introducing a financial compensation scheme for those affected by the delayed state pension age letters.
In its response, the government said: "The PHSO assumed that earlier letters would have been universally read and recalled, which we believe is flawed logic because of the evidence about the effectiveness of unsolicited letters. However, the government’s decision is not solely based on this flaw.
"Awareness of state pension age changes was high among 1950s-born women (73% of women in this group knew that state pension age was changing in 2004, and 90% in 2006, even if they may not have known exactly when). While not all knew, the majority did.
"Creating a scheme to assess individual injustice would be highly impractical due to high claim volumes and the need to review each case. A rules-based or flat-rate system would also face significant challenges, with the potential for a high number of unjustified payments.
"Introducing such a scheme is neither fair nor feasible and would not represent good value for taxpayers. Therefore, no financial compensation scheme will be set up. Given that we will not be creating a scheme to pay compensation to 1950s-born women, we do not consider it would be appropriate to pay compensation to the six sample complainants."
Speaking this afternoon in the Commons, work and pensions secretary Liz 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.
“The alternative put forward in the report is for a flat-rate compensation scheme, at level four of the Ombudsman’s scale of injustice, this would provide £1,000 to £2,950 per person at a total cost of £3.5bn and £10.5bn.
“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 £10.5bn would be fair or proportionate to taxpayers.”
Steve Webb, partner at pension consultants LCP and former pensions minister, commented: “The government’s handling of this issue sets an extremely worrying precedent. If it is acceptable for a Department to completely reject the findings of a report by the independent Parliamentary Ombudsman, this strikes a blow at the heart of the whole process. There is a risk that governments will now feel emboldened to ‘pick and choose’ when faced with a critical Ombudsman report, effectively setting themselves up as judge and jury. Even if the government felt it could not afford to implement the recommendations in full, there were many options which would have offered some redress to those most affected. Outright rejection of the Ombudsman’s report raises much wider issues than compensation over pension age changes, and MPs should not take this decision lying down.”
Liberal Democrat work and pensions spokesperson, Steve Darling MP, added: “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.
“The Conservative party left our economy in a shambles, but asking wronged pensioners to pay the price of their mismanagement is simply wrong.
“For years, Liberal Democrats have pushed the government to fairly compensate WASPI women in line with the Ombudsman’s recommendations. Today’s heartless decision cannot be allowed to stand and we will be pressing ministers to give those affected the fair treatment they deserve."
