A recent report into the handling of historic State Pension Age increases for women has accused the Department for Work of Pensions (DWP) of “maladministration”.
The five-year-long investigation recommends compensation for thousands of women born in the 1950s but falls short of the redress sought by the “Waspi” movement (Women Against State Pension Inequality).
While the report found issues with the scale, timing, and delivery of important pension communications, the DWP has indicated that it will not act on the report’s findings.
Keep reading to find out more about the Waspi movement, what the latest report might mean for their campaign, and how to ensure you make the most of your State Pension entitlement.
The Waspi movement is seeking compensation for thousands of women affected by the State Pension Age increase
When the modern State Pension arrived in 1948, the State Pension Age was 65 for men and 60 for women.
This remained the case until the 1995 Pensions Act, which included a timetable for aligning State Pension Ages across genders. The act looked to gradually increase the State Pension Age for women between 2010 and 2020. In 2011, the coalition government brought this later date forward by two years.
About 2.6 million women were affected by the 2011 changes, but the situation is particularly damaging for those born between December 1953 and October 1954.
Around 300,000 women were nearing what they believed to be their State Pension Age before being told that they had to wait an extra 18 months. This meant continuing in work for longer than planned or living off a private pension, all while being thousands of pounds worse off.
In 2015, five women began the Waspi movement, asking for transitional payments for those women affected.
The campaign doesn’t argue against State Pension Age equalisation. It does, though, suggest that women were inadequately informed of the changes and that many were left with too little time to make alternative arrangements.
The 5-year-long ombudsman report criticises the DWP and recommends financial redress
On 21 March, the Parliamentary and Health Service Ombudsman (PHSO) – the organisation responsible for handling unresolved complaints against government departments – released its report into the DWP’s handling of the State Pension Age change.
It found that communications failed to reach the scale required for such a large change and that some attempts at contact failed to reach their intended audience.
The report’s strongest criticism relates to efforts post-2004. It was in this year that research revealed the extent of pre-retirees ignorance of the changes and the significant gap between “awareness and understanding”.
Waspi campaigners want compensation for those who have already reached the State Retirement Age, plus supplementary income for those yet to reach their later retirement date.
The campaign believed some women should receive £10,000, at a government cost of £36 billion. The PHSO report, meanwhile, recommends payments of around £1,000 to £3,000, based on the sample cases included in the report.
The report claims that the DWP “has clearly indicated it will refuse to comply”, forcing the PHSO to take the “rare but necessary step of asking Parliament to intervene”.
Making the most of your State Pension entitlement could be crucial to your long-term retirement plans
While the State Pension might not be your main source of retirement income, it does provide a solid foundation of regular income on which to build your plans.
For the 2024/25 tax year, the full new State Pension is £221 a week, or just over £11,500 a year. This marks an 8.5% increase on the previous tax year, thanks to the State Pension triple lock. The triple lock is a government commitment to increase the State Pension each year by the highest of:
- UK inflation measured by the Consumer Prices Index (CPI)
- Average wage growth
- 2.5%.
A known and regular income that keeps pace with inflation can be a huge benefit in retirement. Be sure you know when you become eligible and how much you might get.
The current State Pension Age is 66, but this is set to rise to:
- 67 between 2026 and 2028
- 68 between 2044 and 2046.
A review into these increases is set for next year and it’s possible the second rise (to 68) could be sped up.
While changes to the State Pension Age are largely outside of your control, you can ensure you’re in the best position to receive your full entitlement.
To receive the full new State Pension you’ll need 35 qualifying years of National Insurance contributions (NICs). If you have less than 10 years of NICs you won’t receive the State Pension at all.
Check your National Insurance record to see how many years of qualifying NICs you have and be sure to include this information in your long-term plans.
Get in touch
If you have any questions about your State Pension or long-term retirement plans, speak to us now. Please contact us on info@janesmithfinancial.com or call 01234 713131.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Production
