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State pension shake-up: what we know

Just before Christmas, the government made an announcement regarding the long-running Women Against State Pension Inequality (WASPI) campaign. But who are WASPI women, what are they campaigning about and what does the government’s announcement mean for you?

Who are WASPI women and what are they campaigning for?

The WASPI campaign is not opposing the equality of State Pension age for men and women. They do, however assert that there was not adequate communication regarding the change in State Pension age from 60 to 65. They are campaigning for compensation for those affected by the change, and have lobbied successive governments about this issue for many years.

It is estimated that around 3.6 million women born in the 1950s were impacted by the change to State Pension age. The 1995 Pension Act stipulated that the State Pension age would increase from 60 to 65 in a phased fashion, between 2010 and 2020. The Pension Act 2011 saw the coalition government bring forward the end date to this increase, to 2018. This shortened the phased increase by 2 years. State pension age was increased again to 66, in 2020.

WASPI campaigners assert that the affected women had made retirement plans based on the originally announced State Pension age. The changes made have disrupted these plans, meaning some may have had to work for longer than originally planned. Some WASPIs had already retired before they became aware that they were unable to claim State Pension. This put them at risk of financial hardship.

The Parliamentary and Health Service Ombudsman report

The WASPI campaign has gained momentum over the years, eventually being referred to the Parliamentary and Health Service Ombudsman. Following six years of investigation, a report was published in March 2024. In this report, the head of the Parliamentary and Health Service Ombudsman, Rebeccca Hilsenrath, found that the government delayed communicating in writing to affected parties about the increase in State Pension age by 28 months. The Ombudsman recommended compensation of between £1000 and £2950 for each woman impacted. Whilst this could be seen as a success for the WASPI campaigners, the government still needed to comment on the report. The suggested compensation in the report was also significantly less than the £10,000 per person compensation requested by WASPI campaigners.

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What was the government’s reaction?

Despite the report’s publication in March 2024, there was no mention of any compensation in the Labour party’s first Autumn Statement in October 2024. The WASPI campaigners’ disappointment was amplified by the announcement of compensation for a number of other campaigns. In mid-December, Department of Work and Pensions Secretary Liz Kendall, announced the government’s rejection of the notion of paying compensation in this case. She said there was no evidence of “direct financial loss” suffered by the WASPI campaigners, though conceded a “maladministration in communication” about the changes.

Prime Minister Starmer admitted that “taxpayers simply can’t afford the tens of billions of pounds in compensation”. He acknowledged that the delay in telling those affected of changes to State Pension age was “unacceptable”, however asserted that “90% of those impacted did know about it”. The government’s rejection of the Ombudsman’s report findings and suggestions is unprecedented and has fuelled the WASPIs’ frustrations at the government’s inaction in this case. This is further exacerbated by members of the current government’s comments on the campaign prior to being in government.

What members of the government said before they were in power

Several members of the current government had spoken out about the WASPI campaign. When current Chancellor Rachel Reeves was Shadow Pensions Secretary in 2016, she said in a Westminster Hall debate that those impacted by the change in State Pension age were “done an injustice”. Starmer also signed a petition for “fast and fair compensation” in 2012 with Angela Rayner promising in 2019 that should Labour get into power, they would pay compensation within 5 years.

On the other hand, a small number of Labour politicians have spoken out about their disappointment in the government’s decision, including Diane Abbott. At the first Prime Minister’s Questions after the government’s announcement, she asked the Prime Minister if he understood “how let down WASPI women feel today”.

What’s next for State Pension age increases?

The current expectation is that from May 2026, the age will increase to 67. Further increases in age are expected from 2044 to 2046, raising the age to 68. This may be brought forward to 2037 to 2039. Uncertainty in future changes to the State Pension age underline the importance of not relying solely on the State Pension in retirement. Private pensions will allow you more financial freedom to enjoy the retirement you wish for.

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How can Willday Wealth Management help?

Take control of your retirement planning by determining the pension funds you will have available. At Willday Wealth Management, we understand this is one of the most critical financial decisions you’ll make in your life, and we’re committed to helping you achieve your retirement goals. Contact us today to schedule a consultation with one of our financial experts.

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