And so it goes on. The government is to reconsider its decision not to compensate women hit by changes to the state-pension age. Liz Kendall, the work and pensions secretary at the time who made that decision, was apparently not given access to all the evidence she should have reviewed before rejecting a recommendation from the Parliamentary and Health Service Ombudsman (PHSO) to pay compensation of up to £10.5 billion to 3.6 million women born in the 1950s.
Let us hope that Pat McFadden, Kendall’s successor at the Department for Work and Pensions (DWP), upholds her original decision. Many people will instinctively sympathise with a group of older women, some of whom are struggling to get by on low incomes. But the emotional response is the wrong one. The facts of this case do not support a huge compensation payout that would put further pressure on the public finances.
For more than 10 years, Women Against State Pension Inequality (Waspi) has campaigned loudly on behalf of women affected by the policies – including how they were implemented – of successive governments. Waspi has explored every possible legal avenue to redress, kept this issue in the public eye, and at one stage even persuaded the Jeremy Corbyn-led Labour Party to promise a £58 billion windfall.
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Ultimately, however, Waspi’s campaign has come up short because its arguments are unconvincing and short on evidence. Payouts are simply not justified in this case. For one thing, it has not always been clear what Waspi wanted. In the early years of its campaign, the group attacked the decision to equalise the state pension age for men and women. We were told women had been promised they could claim their state pension from age 60: they were being “robbed”, despite faithfully paying national-insurance contributions for decades.
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Those complaints were always nonsense. The decision to raise the state-pension age for women was made by a democratically elected government in 1995 and agreed in Parliament. It reflected the complete transformation of the labour market since the 1940s, when the state pension was first introduced, as well as the cost of paying these benefits. MPs also noted women’s longer average life expectancies.
Should Waspi women be compensated?
Besides, National Insurance contributions have never gone into a dedicated fund to pay pensions. Women were no more robbed than millions of men who started work at a time when the state pension age was 65 but are now having to wait until 66, 67 or even longer to claim, because governments have also decided to raise the now-equalised state pension age.
To be fair, Waspi’s case has shifted in recent times. It now accepts the government of the day has the right to make pension reforms. But it argues that after 1995, too little was done to ensure women affected by equalisation knew what was going to happen – and that as a result, many women suffered hardship they might have avoided if they’d been able to plan ahead. The impact of that failure was compounded in 2010 when the government decided to speed up equalisation, Waspi adds.
Such complaints appear to have been accepted by the PHSO. In 2024, it found the DWP guilty of maladministration after an investigation of the department’s efforts to make women aware of the pending changes to their state-pension rights. Eventually, the ombudsman recommended payments of between £1,000 and £2,950 for all those affected.
However, the maladministration finding refers to a very short window of time. In 2004, the DWP found that the message about equalisation wasn’t getting through to some women. Officials realised they needed to do more, including writing directly to those women, but various failures meant this didn’t happen until 2009. Without those failures, the PHSO concluded, women would have received letters from the DWP 28 months earlier – and thus had more time to act.
This is the straw at which Waspi has been clutching. Its leaders are delighted by the announcement of a fresh look at the decision not to compensate women for 28 months of maladministration. Their reaction is understandable, but Kendall made the right choice – and McFadden should stick with it. The PHSO’s suggested compensation scheme is an extraordinarily blunt and hugely costly response to a minor injustice: an unaffordable sledgehammer to crack a nut.
And it is a minor injustice. That short period of maladministration adversely affected only a small number of women. Research between 2004 and 2009 found that most women knew the state-pension age was rising and many realised they would be affected. But awareness wasn’t spreading fast enough. So of the 3.6 million women potentially caused problems by maladministration, only a minority were actually affected. Many in that much smaller group may not have been able to do much in any case. They were often poorly paid and lacked access to other resources.
Critically, the PHSO suggested paying a flat rate of compensation to all 3.6 million women as it would be impossible to work out which women knew what 20 years ago. The ombudsman was effectively arguing that since there was no way to work out who ended up genuinely worse off because of the DWP’s maladministration, everyone should get a payout.
That feels utterly disproportionate. It can’t be right to ask the taxpayer to foot the bill for payments to large numbers of women who didn’t suffer maladministration and, in many cases, don’t need the money. Unless the evidence Kendall apparently wasn’t shown turns out to be a bombshell gamechanger, McFadden should uphold her decision.
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