In a landmark report, the Parliamentary and Health Service Ombudsman recommends compensation worth £1,000 to £2,950 for women who lost out from the way changes in women’s state pension age were handled. As it expects the Department for Work and Pensions to resist, it is taking the “rare but necessary step” of asking parliament to intervene by laying the report before it.  

The ombudsman previously found the DWP guilty of maladministration over how it handled complaints and communicated changes to women’s state pension age. PHSO said in its latest report, published on Thursday, that the complaint handling caused unnecessary stress and anxiety, and for some also unnecessary worry and confusion. It also accuses DWP of “a systemic failure in how DWP responds to what research and feedback is telling it”.  

The ombudsman notes that it is unusual for organisations not to act on PHSO’s recommendations but adds: “What DWP has told us during this investigation leads us to strongly doubt it will provide a remedy.” 

PHSO adds: “Given the scale of the impact of DWP’s maladministration, and the urgent need for a remedy, we are taking the rare but necessary step of asking parliament to intervene.”  

It said that based on its principles, the DWP’s and the Treasury’s guidance, “parliament may want to take steps to make sure DWP is held to account to demonstrate continuous improvement in teh service it provides”.  

Compensating all women born in the 1950s would cost taxpayers around £3.5bn to £10.5bn, PHSO noted.  

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 spokesperson added: “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 12m pensioners by £900." 

Women born in the 1950s saw their state pension age rise from 60 but some did not understand that this would happen. As it became evident that the changes were not universally known, DWP was urged by MPs to act on this information but failed to do so.  

Some women said thinking their state pension age was 60 meant they retired or reduced their hours sooner than they would have had they known their real state pension age,  suffering hardship as a result.  

Threatening a judicial review, campaign group Women Against State Pension Inequality got PHSO to settle and reconsider its report into how government communicated the changes in state pension age – with possible effects on how much compensation PHSO would recommend.  

Figures by the DWP out on Thursday show that the DWP is also slowing down in efforts to correct state pensions that were due to some pensioners, with nine in 10 of the affected being women.