The UK’s Department for Work and Pensions (DWP) is facing a storm of criticism. A local ombudsman has just ruled that DWP failed in its administration of the increases in the state pension age, finding maladministration. What we found was a huge problem with communication surrounding the 1995 Pensions Act. Consequently, hundreds of thousands of women, primarily those born in the 1950s, have been plunged into economic crisis. Since then the state pension age has increased from 60 to 65 and then on to 66. Worse, this sudden change has wrecked the retirement plans of countless women.
The ombudsman’s report highlighted that some women received as little as 12 months’ notice about a six-year delay in their pension eligibility. This sudden shift has caused millions of people, including many borrowers, immediate and extensive economic harm. The DWP’s extensive delays in followup communications are indefensible. The report calls for affected women to be compensated, suggesting figures ranging from £1,000 to £2,950. The overall cost of compensation to all the affected people could go as high as £10.5 billion.
The project’s investigation revealed a shocking blind spot. Yet the DWP failed to notify impacted women for nearly 14 years following the enactment of the law. That exclusion has generated a great deal of justifiable concern as to the agency’s failure in its duty of care to keep its constituents adequately informed. Angela Madden, chair of the campaign group Women Against State Pension Inequality (Waspi), was incredulous at the DWP’s rejection of the investigation’s findings. She stressed that the state of the world is grim.
“The DWP’s refusal to accept the clear conclusions of this five-year-long investigation is simply unbelievable. One of the affected women is dying every 13 minutes, and we just cannot afford to wait any longer.” – Angela Madden
The report identified that many women expected to receive their pensions at age 60, only to discover their state pension age had been pushed back by several years. In fact, one complainant – “Ms U” – indicated that this caused her a gross financial loss of £39,000 from this delay. Another woman, referred to as “Ms W,” estimated she lost a jaw-dropping £442,894 in prospective earnings. She credits this defeat to serving in her position longer than she would have liked.
In response to the report, the DWP said it would take time to assess the ombudsman’s report and respond accordingly. In response, a spokesperson noted that the government was determined to protect pensioners, but be fair to taxpayers.
“We will consider the ombudsman’s report and respond in due course, having cooperated fully throughout this investigation.” – DWP spokesperson
The ombudsman admitted that not all women were wronged. Nevertheless, thousands did suffer emotional and financial trauma due to the illegal mishandling of information regarding their pension benefits. The report stated that there are “likely a significant number of women born in the 1950s who have … suffered injustice because of maladministration in DWP’s communication about the 1995 Pensions Act.”
Former pensions minister Steve Webb said We have a crisis on our hands. He says he expects women who’ve been harmed to get some measure of real justice in the end.
“So, I think we will end up with some form of rough justice – I would guess in that £1,000 to £3,000 range that the ombudsman has recommended.” – Steve Webb
The ombudsman’s findings have created continuing high political pressure on parliament. Specifically, they need to protect the roughly 3.6 million women impacted by these changes. In a significant and unusual step, the Parliamentary and Health Service Ombudsman (PHSO) has gone further. They are demanding to parliament to step up and bring these women to justice.
The findings have incited outrage among those affected and campaigners alike, who argue that women should not bear the burden of miscommunication regarding their retirement plans. One woman suddenly had her pension age raised, costing her £186,000. Yet this case serves as an important reminder of the extreme consequences that these unnecessary changes can have on vulnerable people.
While MPs take time to think through their next steps, thousands of women are still worrying about their financial futures. The ombudsman called on parliamentarians to fix this injustice as soon as possible.