The Ombudsman has been investigating the matter for several years, and in an initial report in July 2021 it found the DWP guilty of maladministration in the handling of the changes.
The PHSBO report follows campaigning from women who saw their retirement age aligned with that of men.
Changes to women's state pension age were introduced by:
- The Pensions Act 1995 (which provided for a rise in women's pension age from 60 to 65) and
- The Pensions Act 2007 (which included provision to increase both men's and women's pension age to 66 between 2024 and 2026, to 67 by 2036, and to 68 by 2046).
However, the Pensions Act 2011 accelerated this timetable and, for some women born in the 1950s, the combined effect of the 1995 Act and 2011 Act meant an increase in state pension age of up to six years at relatively short notice.
Women complained to the PHSO that the DWP did not communicate changes to their State Pension age well enough. This caused them financial loss, financial hardship and suffering, and meant they lost opportunities to make informed decisions and effectively plan for retirement.
They also said it had a negative impact on their health, emotional wellbeing and home life.
The 2014 Pensions Act sets out the eligibility criteria for the new State Pension. How much new State Pension someone can claim is based on their National Insurance record.
Women also complained that they lost out financially because the DWP did not communicate well enough how many National Insurance qualifying years they needed for a full State Pension.
Research showed too many people did not understand their own situations and how the new State Pension affected them personally.
The PHSO has said those affected should be compensated. But the recommended payouts of between £1,000 and £2,950 a person fall far short of the £10,000 plus that campaigners were calling for.
However, the Ombudsman cannot compel the government to pay compensation, and said the DWP had clearly indicated it would “refuse to comply”, which was “unacceptable”.
As a result, the PHSO said it was “taking the rare but necessary step of asking parliament to intervene”.
PHSO Chief Executive Rebecca Hilsenrath, said: ”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.”
Women Against State Pension Inequality (Waspi) say millions have lost out due to the change and campaigned for compensation after retirement plans were harmed by the change.
Waspi chairwoman Angela Madden said: “It is now for each political party to put their money where their mouth is and support compensation of that order.
“Waspi women are watching and waiting to see whether politicians who have long supported the campaign will now deliver.”
The PHSO report Women’s State Pension age: our findings on injustice and associated issues is available from ombudsman.org.uk.
Note: In a separate exercise, the DWP has identified almost 100,000 cases of underpaid state pension.
In 2020, the DWP became aware of a number of individuals who had not had their state pension increased automatically, and has been undertaking an exercise to identify those affected and to repay any underpayments.
For more information see State Pension underpayments: progress on cases reviewed to 29 February 2024 available from gov.uk