DWP knew women did not know about SPA changes, says PHSO
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The Department for Work and Pensions knew that awareness of planned state pension age changes among women was not as high as it wanted it to be, the deputy of the Parliamentary and Health Service Ombudsman has told MPs, putting into question the government’s argument for denying compensation to 1950s-born women.
Late last year, work and pensions secretary Liz Kendall justified refusing compensation to 3.5m women by claiming that in 2006, most of them knew about the state pension age changes. The decision caused disbelief and anger among those affected.
As part of its inquiry into pensioner poverty, the Work and Pensions Committee on Wednesday received evidence from PHSO and representatives of campaign group Women Against State Pension Inequality about the issue.
The deputy ombudsman told the committee that the argument that ‘most women knew’ contradicts the department’s own assessment at the relevant time.
A government spokesperson said: “We accept the ombudsman’s finding of maladministration and have apologised for there being a 28-month delay in writing to 1950s-born women. However, evidence showed only one in four people remember reading and receiving letters that they weren’t expecting and that by 2006 90% of 1950s-born women knew that the State Pension age was changing."
The spokesperson added: “Earlier letters wouldn’t have affected this. For these and other reasons the government cannot justify paying for a £10.5bn compensation scheme at the expense of the taxpayer.”
Late last year, work and pensions secretary Liz Kendall justified refusing compensation to 3.5m women by claiming that in 2006, most of them knew about the state pension age changes. The decision caused disbelief and anger among those affected.
As part of its inquiry into pensioner poverty, the Work and Pensions Committee on Wednesday received evidence from PHSO and representatives of campaign group Women Against State Pension Inequality about the issue.
The deputy ombudsman told the committee that the argument that ‘most women knew’ contradicts the department’s own assessment at the relevant time.
A government spokesperson said: “We accept the ombudsman’s finding of maladministration and have apologised for there being a 28-month delay in writing to 1950s-born women. However, evidence showed only one in four people remember reading and receiving letters that they weren’t expecting and that by 2006 90% of 1950s-born women knew that the State Pension age was changing."
The spokesperson added: “Earlier letters wouldn’t have affected this. For these and other reasons the government cannot justify paying for a £10.5bn compensation scheme at the expense of the taxpayer.”
What happened?
A six-year PHSO investigation found maladministration by the DWP, saying the department should have sent its letters alerting women that their state pension age was rising nearly two-and-a-half years sooner than it did. In March 2024, PHSO therefore recommended compensation of £1,000 to £2,950 for distress.
While the previous government stayed silent on the report, the new one responded just before the Christmas break – apologising for the maladministration but saying that no compensation will be paid. In doing so, Kendall cited figures stating 90% of middle-aged women were aware of the SPA changes. She also claimed that sending letters earlier would not have had the impact the ombudsman says, and that paying out up to £10.5bn would be unfair to taxpayers.
PHSO: DWP itself decided more awareness was needed
Deputy ombudsman Karl Bannister has now said it is “pleasing” the government has accepted there was maladministration and that it has apologised for it, after the previous government had denied any wrongdoing.
However, he was critical of the government’s claim that 90% of women were aware of the changes. Instead, Bannister said the DWP itself at the time had lower figures for awareness than the 90% cited by Kendall, which is based on a survey of 170 women.
“And in the end the fundamentals are here, in making a decision, [that] DWP itself, at the time, knew that women did not know,” he said.
“In a way it’s a red herring about the numbers. It accepts women didn’t know, it accepted it at the time, and it had identified that and thought it should do something about it,” he said.
“The whole case, the whole investigation is simply about that. DWP knew. That was not what it wanted. And it didn’t act on what it itself said it should do at the time. So it’s not helpful to introduce a debate about the numbers of people,” Bannister told MPs.
Waspi chair Angela Madden also said the DWP had based its 2005 decision to send out letters on a 2004 survey that showed low awareness of the impending changes among women.
Bannister suggested that the DWP, in effect, cannot have it both ways, saying if the department accepts maladministration – as it has done – it therefore accepts women did not know.
He added: “Then there is a debate, if you accept maladministration, you accept people are affected by that maladministration, how you factor in cost into the need to do justice.”
However, he was critical of the government’s claim that 90% of women were aware of the changes. Instead, Bannister said the DWP itself at the time had lower figures for awareness than the 90% cited by Kendall, which is based on a survey of 170 women.
“And in the end the fundamentals are here, in making a decision, [that] DWP itself, at the time, knew that women did not know,” he said.
“In a way it’s a red herring about the numbers. It accepts women didn’t know, it accepted it at the time, and it had identified that and thought it should do something about it,” he said.
“The whole case, the whole investigation is simply about that. DWP knew. That was not what it wanted. And it didn’t act on what it itself said it should do at the time. So it’s not helpful to introduce a debate about the numbers of people,” Bannister told MPs.
Waspi chair Angela Madden also said the DWP had based its 2005 decision to send out letters on a 2004 survey that showed low awareness of the impending changes among women.
Bannister suggested that the DWP, in effect, cannot have it both ways, saying if the department accepts maladministration – as it has done – it therefore accepts women did not know.
He added: “Then there is a debate, if you accept maladministration, you accept people are affected by that maladministration, how you factor in cost into the need to do justice.”
Compensation could be less than £10.5bn
For the government, cost is the crux of the matter given that finances are constrained, but Bannister believes a compensation scheme could be structured in a way that would keep costs below the £10.5bn maximum figure.
The government has to date not shied away from agreeing to compensation in other long-running cases. Under the current government, core voter groups have also received payouts, with a £1.5bn investment reserve already transferred to mineworkers to “end the injustice” of the scheme structure, and ministers are currently discussing if £2.3bn should be handed to the British Coal Staff Superannuation Scheme.
The government has to date not shied away from agreeing to compensation in other long-running cases. Under the current government, core voter groups have also received payouts, with a £1.5bn investment reserve already transferred to mineworkers to “end the injustice” of the scheme structure, and ministers are currently discussing if £2.3bn should be handed to the British Coal Staff Superannuation Scheme.
Value for taxpayers was cited as a reason for not compensating women. According to Madden, Waspi commissioned a survey from Yonder, conducted among 2,079 adults – most of them of working age – at the start of January this year, which found three-quarters (74%) agreed that the government should follow the ombudsman’s recommendation to compensate women.
The government has refused a mass payout to Waspi women, but it also has not compensated the six women whose cases the PHSO discussed individually, something Bannister suggested was highly unusual for an investigation.
He also revealed that departments and health institutions would normally meet and thrash out alternative compensation plans with PHSO – but no such discussions ever took place with the DWP. Bannister said the question of a discussion did not even arise as the previous government never accepted the ombudsman’s findings.
He also revealed that departments and health institutions would normally meet and thrash out alternative compensation plans with PHSO – but no such discussions ever took place with the DWP. Bannister said the question of a discussion did not even arise as the previous government never accepted the ombudsman’s findings.
'Airbrushed out of history’
For those affected, the decision to refuse compensation adds insult to injury, not least because the state pension is often their main source of income. Waspi’s communications director Debbie de Spon said for some women, compensation of £1,000 or up to £3,000 would make a big difference.
“Even though it doesn’t cover what they might have lost, it’s an acknowledgement that there has been maladministration,” she said. “Because we feel disempowered. We feel we’re sort of being airbrushed out of history.”
“Even though it doesn’t cover what they might have lost, it’s an acknowledgement that there has been maladministration,” she said. “Because we feel disempowered. We feel we’re sort of being airbrushed out of history.”
Daniella Jenkins, a senior lecturer at Bristol University and policy adviser to the Women's Budget Group, explained to the committee that the effect of women’s working lives is felt in retirement, with more than two-thirds of pensioners in poverty being women.
“A number of women are paying the price for discrimination they faced in the labour market at the time,” she said.
Female-dominated roles were and are not only paid less, they were also less likely to come with a generous occupational pension scheme than male-dominated roles, she noted. Until 1997, it was legal to exclude part-time workers from occupational pension funds – a practice that penalised women as society’s main providers of unpaid care.
Is the government being selective about women’s awareness of state pension age changes?
“A number of women are paying the price for discrimination they faced in the labour market at the time,” she said.
Female-dominated roles were and are not only paid less, they were also less likely to come with a generous occupational pension scheme than male-dominated roles, she noted. Until 1997, it was legal to exclude part-time workers from occupational pension funds – a practice that penalised women as society’s main providers of unpaid care.
Is the government being selective about women’s awareness of state pension age changes?
