A finance expert has slammed the Labour Government for deciding against compensating women impacted by the WASPI issue. As MPs were winding down for the Christmas holidays, pensions minister Liz Kendall announced in the House of Commons that there would be “no scheme” to compensate the WASPI (Women Against State Pension Inequality) generation.
These women born in the 1950s faced a sudden jump in their state pension age from 60 to 65 and then 66. Critics argue that the Department for Work and Pensions (DWP) failed to adequately inform them about the changes.
The Parliamentary and Health Service Ombudsman said there was “maladministration” in the way the DWP communicated the changes and suggested compensation amounts ranging from £1,000 to £2,950. Yet the Labour Government rejected the idea of a compensation scheme, arguing it would not be a good use of taxpayers’ money.
Personal finance expert at Ocean Finance, Fiona Peake, said there was understandably “frustration and anger” felt over the situation. She highlighted: “While the Government has pointed to budget constraints, it doesn’t change the fact that the communication around these changes was poorly handled.
“The lack of compensation feels particularly unjust given the financial hardship this decision has caused for many women.” Looking ahead, she emphasised the need for transparent and timely communication regarding any pension system changes, to allow people adequate time to plan.
Further changes to the state pension age are imminent. Currently, it stands at 66 for both men and women, but it will increase in stages to 67 between 2026 and 2028. Another increase from 67 to 68 is timetabled for 2044 to 2046, although there is speculation that this change may be accelerated.
The Government is expected to provide an update on the state pension age within the next two years. David Kindness, an accountant and writer at Best Money, also criticised the Government’s decision, stating: “The Government’s choice not to compensate WASPI women is a slap in the face to those who built their retirement plans around promises that were broken without warning.”
He added: “Many of these women have faced years of financial stress and emotional turmoil because of changes to the pension age that weren’t communicated properly.” Since the decision, MPs who supported the campaign have launched renewed efforts to secure compensation.
An early day motion, signed by 34 MPs at the time of writing, urges ministers “to rethink this heartless decision and give those affected the fair treatment they deserve”. Several individual MPs have previously expressed support for compensation, including Labour’s Debbie Abrahams, who now chairs the Work and Pensions Committee, and work and pensions minister, Sir Stephen Timms.
The Liberal Democrats have long advocated for payouts, with the SNP and the Green Party also endorsing the campaign as a party position.