Work and Pensions Secretary Liz Kendall has announced there will be no compensation scheme for an estimated 3.5 million 1950s-born women affected by changes to their State Pension age. Making the statement to MPs in Parliament on Tuesday, Ms Kendall explained that following a thorough review by the Department for Work and Pensions (DWP) of the Parliamentary and Health Service Ombudsman’s (PHSO) final report, published on March 21, she apologised on behalf of the UK Government to all women impacted by changes to their retirement age.
Ms Kendall told the Commons: “I know this is an issue of huge concern to many women, which has spanned multiple Parliaments. My Hon Friend, the Pensions Minister and I have given the Ombudsman’s report serious consideration and looked in detail at the findings, and information and advice provided by the Department, which was not available to us before coming into Government.”
She explained that the PHSO looked at six cases and found that the DWP provided “adequate and accurate information on changes to the State Pension age between 1995 and 2004” but added that “decisions made between 2005 and 2007 led to a 28-month delay in sending out letters to women born in the 1950s.”
Ms Kendall admitted there was maladministration by the DWP. She said: “We accept that the 28-month delay in sending out letters was maladministration.
“And on behalf of the Government, I apologise. “
She continued: “We also agree with the Ombudsman’s findings that the women suffered no direct financial loss because of this maladministration. However, we do not agree with the Ombudsman’s approach to injustice or remedy. And I want to spell out why.
“First, the report does not properly take into account research showing there was actually considerable awareness that the State Pension age was increasing. It references research from 2004 showing 43 per cent of women aged over 16 were aware of their State Pension age, but it doesn’t sufficiently recognise evidence from the same research that 73 per cent of women aged 45-54 – the very group that covers women born in the 1950s – were aware that the State Pension age was increasing, or research from 2006 that 90 per cent of women aged 45-54 were aware that the State Pension age was increasing.”
Compensation
Ms Kendall highlighted that “most women knew the State Pension age was increasing” and that letters issued, or not issued, “aren’t as significant as the Ombudsman says”.
She added: “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 PHSO’s final report stated that “Parliament must urgently identify a mechanism for providing that appropriate remedy” and recommended compensation equivalent to level four on its banding scale, which is worth between £1,000 and £2,950.
Ms Kendall continued: “The Ombudsman says that, as a matter of principle, redress and compensation should normally reflect individual impact. However, the report itself acknowledges that assessing the individual circumstances of 3.5 million women born in the 1950s would have a significant cost and administrative burden.
“It has taken the Ombudsman nearly six years to investigate the circumstances of six sample complaints.
“For the DWP to set up a scheme and invite 3.5 million women to set out their detailed personal circumstances would take thousands of staff years to process. Even if there was a scheme where women could self-certify that they weren’t aware of changes to their State Pension age, and that they have suffered injustice as a result, it would be impossible to verify the information provided.”
Ms Kendall also addressed proposals for a ‘flat rate’ compensation scheme. She said: “The alternative put forward in the report is for a flat rate compensation scheme, at level 4 of the Ombudsman’s injustice scale.
“This would provide £1,000 to £2,950 per person, at a total cost between £3.5 and £10.5 billion.
“Given the great majority of women knew that the State Pension Age was increasing, the Government does not believe paying a flat rate to all women – at a cost of up to £10.5 billion – would be a fair or proportionate use of taxpayers’ money.”
Commenting on the announcement, Angela Madden, Chair of Women Against State Pension Inequality campaign (WASPI) said: “The Government has today made an unprecedented political choice to ignore the clear recommendations of an independent watchdog which ordered ministers urgently to compensate WASPI women nine months ago.
“This is a bizarre and totally unjustified move which will leave everyone asking what the point of an ombudsman is if ministers can simply ignore their decisions. It feels like a decision that would make the likes of Boris Johnson and Donald Trump blush.
“The idea that an ‘action plan’ to avoid such mistakes in future should be the result of a six-year Ombudsman’s investigation is an insult both to the women and to the PHSO process.
“An overwhelming majority of MPs back WASPI’s calls for fair compensation and all options remain on the table. Parliament must now seek an alternative mechanism to force this issue on to the order paper so justice can be done.”
The announcement was met with backlash from several opposition MPs.
You can read the full report from the DWP on the GOV.UK website here.