DWP failed to adequately communicate changes to Women’s State Pension age: Ombudsman issues critical report into WASPI situation: reaction from the industry

by | Mar 21, 2024

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A comprehensive investigation by the Parliamentary and Health Service Ombudsman has found that thousands of women may have been affected by DWP’s failure to adequately inform them that the State Pension age had changed.  They have released the results of their ongoing investigation today. Ahead of the announcement, many so called WASPI women have been campaigning and hoping for some redress or compensation for the way in which the Government dealt with increases to the state pension age.

The PHSO statement is as follows:

The 1995 Pensions Act and subsequent legislation raised the State Pension age for women born on or after 6 April 1950. We investigated complaints that, since 1995, DWP has failed to provide accurate, adequate and timely information about areas of State Pension reform. 

We published stage one of our investigation in July 2021. Our investigation found failings in the way DWP communicated changes to women’s State Pension age. 

 
 

This final report combines stages two and three of our investigation.  It both considers the injustice resulting from the maladministration we identified during stage one and also sets out our thinking about remedy. 

To date, DWP has not acknowledged its failings nor put things right for those women affected. DWP has also failed to offer any apology or explanation for its failings and has indicated it will not compensate women affected by its failure. 

DWP’s handling of the changes meant some women lost opportunities to make informed decisions about their finances.  It diminished their sense of personal autonomy and financial control. 

 
 

PHSO Chief Executive Rebecca Hilsenrath, said:  

“The UK’s national Ombudsman has made a finding of failings by DWP in this case and has ruled that the women affected are owed compensation. DWP has clearly indicated that it will refuse to comply. This is unacceptable.  The Department must do the right thing and it must be held to account for failure to do so.   

“Complainants should not have to wait and see whether DWP will take action to rectify its failings. Given the significant concerns we have that it will fail to act on our findings and given the need to make things right for the affected women as soon as possible, we have proactively asked Parliament to intervene and hold the Department to account.  

 
 

“Parliament now needs to act swiftly, and make sure a compensation scheme is established.  We think this will provide women with the quickest route to remedy.”   

The investigation has been complex and involved analysing thousands of pages of evidence. On a number of occasions, parties were allowed additional time to consider and comment on our views. We also agreed last year to look again at part of our stage two findings following a legal challenge.  All of this resulted to delays in the final report. 

The report has been laid before Parliament, with a request that it looks at our findings and intervenes to agree a remedy for the women affected. While Parliament will make its own decisions about rectifying the injustice, we have shared what we consider to be an appropriate remedy. In addition to paying compensation, we have made it clear that DWP should acknowledge its failings and apologise for the impact it has had on complainants and others similarly affected. 

The Ombudsman has received a series of complaints relating to how well DWP has communicated a variety of State Pension reforms. Concerns about communication of changes to the State Pension age constitute only one such area of complaint. The Department has also declined to act on other issues that have been consistently highlighted in complaints.  A report from the Ombudsman later in the year will set these out. 

Commenting on today’s report by the Parliamentary Ombudsman on changes to women’s state pension age, Steve Webb, partner at LCP said:

“If DWP refuses to accept the Ombudsman’s recommendation and refuses to establish a redress scheme, there is no chance that this position will hold.  Particularly during an Election year, the Government will struggle to secure a majority for ignoring the Ombudsman’s report.  Instead DWP should respect the Ombudsman’s conclusions, which have been carefully considered over many years, and should come up with a redress scheme for their failure to notify women of sometimes life-changing increases in their state pension age”.

Tim Middleton, Director of Policy and External Affairs, at the PMI said: “It is now 27 years since the changes to women’s State Pension Age were enacted, so it is a matter of grave concern that this dispute remains unresolved. Given that the Parliamentary and Health Service Ombudsman (PHSO) has now ruled in favour of the WASPI women, we would have expected the DWP to respect the ruling and to have agreed to pay compensation. It is a further cause for concern that the DWP has refused to co-operate. Whilst we must all recognise the need to increase State Pension Age, it is important that the Government manages the transition in a manner that is fair and lawful and that those are entitled to compensation are not required to wait any longer.”

Danni Hewson, head of financial analysis at AJ Bell, comments:

The WASPI women will today be claiming a victory of sorts. Millions of women were affected by increases in their state pension age originally put forward in the 1995 Pensions Act. These women will feel understandably angry they weren’t given adequate information about the changes, which would have such a profound impact on their retirement plans.

“However, although the Ombudsman found the DWP guilty of maladministration back in July 2021, the DWP has so far not put its hands up to acknowledge its failings nor take any action to compensate these women.

With the DWP effectively ghosting its findings so far, the Ombudsman has passed this political and potentially expensive hot potato into the hands of a government already struggling with stretched public finances.

This would be no cheap solution. The Ombudsman puts the cost of compensating all women born in the 1950s at between £3.5 billion and £10.5 billion, although it acknowledges not all of them will have been affected. There will be pressure to move quickly, but this is something that could be kicked into the long grass if a May election is called at what now is the 11th hour.”

Lily Megson, Policy Director at My Pension Expert, said: “The DWP is playing for time that it just doesn’t have. It’s promising to respond to the Ombudsman’s report in “due course”, but if this process drags on then pressure will only grow on the government to offer suitable compensation to those affected.

“Ultimately, this case demonstrates the importance of clearer communication around pension policies. When reforms are introduced, consumers need to be made well aware of what the changes entail and how they will impact their finances. A crucial part of this – one that is so often overlooked – is opening up better pathways so people can seek out financial information, guidance and advice.

“The government may fall back on the excuse that it provides suitable warning over changes to the state pension age, but the truth is that people need much, much more support in understanding the rules that govern their pensions and retirements. Hopefully today’s report is the wake-up call the government needs to develop a robust strategy for improving pension engagement and education around financial planning, including the value of independent advice.”

Becky O’Connor, Director of Public Affairs at PensionBee comments: “It’s reassuring to see the Parliamentary and Health Service Ombudsman acknowledge the necessity of compensation for the WASPI cohort. 

“The push for the establishment of a compensation scheme, overseen by Parliament, marks a critical step forward in aiding those who suffered financial losses and a loss of ability to make informed financial decisions, due to insufficient communication from the Department for Work and Pensions regarding State Pension age adjustments. 

“The Department for Work and Pensions holds a substantial responsibility to guarantee transparent communication regarding pension changes. It’s imperative that it is held accountable for any shortcomings in fulfilling this obligation, as these can significantly impact an individual’s retirement outcomes.”

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