Rachel Reeves will have her autumn budget on October 30 (Image: Getty)
Victims of a ￡1billion state pension injustice must be compensated, ministers have been warned.
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It would be “outrageous” if stretched public finances were used as an excuse to deny them payments.
Tens of thousands of married women were affected and many are still to receive any compensation from the Department for Work and Pensions.
Former pensions minister Sir Steve Webb, a partner at consultants LCP, said: “I have been campaigning for the women affected for many years, and a number of complaints are currently still working their way through the system.
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“If those complaints are upheld, it might land the government with a big bill. But it would be outrageous if the state of the public finances meant that the government tried to avoid paying that bill.
“These women have lost many thousands of pounds through no fault of their own, and they deserve to have this put right.”
A number of scenarios could still play out and no firm decisions have been made by any of the parties involved in the state pensions uplift issue.
Chancellor Rachel Reeves claims she inherited a ￡22 billion black hole in the public finances, an allegation strongly refuted by her predecessor Jeremy Hunt.
The fear is ministers may decide to ignore an ombudsman ruling to compensate potentially hundreds of thousands hit by a separate issue.
This could then set a precedent if the watchdog decided to rule that women affected by pension shortfalls should also be repaid. No decision has been made.
Angela Madden, chair of Women Against State Pension Inequality (WASPI), said: “The Parliamentary Ombudsman made a crystal clear finding of wrongdoing in the way the Government failed to communicate changes to women’s State Pension age.
“More than 16,000 WASPI women have tragically died since ministers were ordered to apologise and pay compensation in March 2024. We simply cannot afford to wait any longer for justice.
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“No matter who is in power, the government of the day has a responsibility to put things right.
“If the Prime Minister wants to restore faith in politics, he must listen to the calls of hundreds of his own MPs who are backing WASPI’s calls for fair and fast compensation.”
The separate pension shortfall issue relates to a former state pension system where married women who had a small pension in their own right could claim a 60% basic state pension based on their husband's record of contributions.
Jan Tiernan, 84, was initially told she was not owed any money.
But after nearly 100 pages of correspondence with the department, she received ￡1,280.
The pensioner, from Fife in Scotland, believes she is owed more than ￡17,000 in missed payments.
She said: "You need a lot of energy, and when you are 84-years-old you don't have that kind of energy. It tires you.
"I feel let down by the system."
She said that the extra money would have made a big difference to pensioners, from helping to pay heating bills to going towards a holiday.
Since 2008, the uplift from a woman’s state pension to the 60% rate of their husband’s award has taken place automatically when he retired.
Before that, married women had to fill in a pension form to claim the increase. But many were not aware of the requirement – and missed out.
Although booklets that were available at the time explained the need to make a claim, the information was not sent automatically to women and it had to be requested.
When the husband stopped work, he could tick a box if his wife was on a low pension and a form would be sent directly to him.
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A decision by the Independent Case Examiner, a watchdog which deals with complaints against the Department for Work and Pensions, upheld a case of maladministration over the issue last year.
Although it related to only one case, it raised hopes that other women will be able to follow the same route to access compensation.
Campaigners also hope that the Parliamentary Ombudsman will rule that the problem needs to be fixed systematically, rather than on a case by case basis.
While the figures will vary for individual claimants, some experts believe that around ￡1,000 a year is a reasonable assumption.
Dennis Reed, director of over-60s campaign group Silver Voices, said: "The fact that there is even a question mark over whether compensation should be paid to thousands of women who were robbed of their entitlements by yet another DWP blunder is a sad indictment of the way pensioners are being treated in the early days of this Government.
“Rightful compensation for sub-postmasters and victims of the blood scandal yes, but the WASPI women and these thousands of married older women, they can wait and protest and wait until they die".
The WASPI group has held protests about pensions issues for many years.
Campaigners said that almost four million women born in the 1950s had their retirement plans plunged into chaos, with many of them left thousands of pounds out of pocket after the DWP increased the state pension age from 60 to 65, and then to 66.
Some said they received only 12 months’ notice of a six-year delay to their pension.
Meanwhile Ms Reeves is facing a ￡47 billion bill in outstanding compensation claims, the TaxPayers’ Alliance (TPA) has said.
Their analysis of a report by the National Audit Office showed ￡84 billion has been pledged by previous governments, with 12 compensation schemes for injustice, cover-ups and negligence.
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Although much of that sum has been paid out by the British state, almost ￡47 billion is still owed in high-profile cases such as the infected blood and Post Office Horizon scandals.
Elliot Keck, head of campaigns at the TPA, said: "Taxpayers have been horrified by our revelations that they could be forced to foot such a vast bill to try and fix mistakes made by the state.
"Ordinary Brits are completely blameless for these all-too frequent catastrophes, yet it's from their pockets that the compensation will be paid.
"The new government should ensure that similarly horrendous errors don't happen on their watch."
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Referring to a WASPI report from the Ombudsmen, a DWP spokesperson said: “This was a serious report, requiring serious consideration. We will need time to carefully review and consider the Ombudsman’s report. Once this work has been undertaken, we will be in a position to outline our approach.
“We will continue to listen respectfully to the women involved, and ensure we take on board any lessons learnt.”
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By Former pensions minister Sir Steve Webb, a partner at pension consultants LCP
Under the old state pension system, many women built up very poor pensions in their own right.
This could be because of time out of paid work raising a family or because they worked and paid National Insurance at a special lower rate for married women.
Either way, they may have received only a very small state pension.
To try to help women in this situation, the old state pension system allowed them to receive a ‘married woman’s pension’ when their husband retired.
This was generally paid at 60% of the full rate of the basic state pension.
The problem is that until 2008, women did not get this payment automatically.
Instead, they had to put in a second claim to state pension to get an uplift to the married woman’s rate, even if they were already drawing a small state pension in their own right.
Unfortunately, many tens of thousands of married women missed out on money which was rightfully theirs.
In some cases I have come across, women didn’t find out about the need to make this ‘second’ claim for well over a decade after the event.
And when they did finally claim the uplift, they were told that the Government would only backdate the uplift for one year – all the rest of the money was gone for good.
The Department for Work and Pensions say that there were leaflets and booklets which explained the rules.
But most people would assume that when they claim their state pension they get everything they are entitled to, and wouldn’t go hunting for extra information.
They certainly wouldn’t expect that, after claiming their own pension at sixty, they needed to submit another pension claim once their husband retired, often years later.
I have been campaigning for the women affected for many years, and a number of complaints are currently still working their way through the system.
If those complaints are upheld, it might land the government with a big bill. But it would be outrageous if the state of the public finances meant that the government tried to avoid paying that bill. These women have lost many thousands of pounds through no fault of their own, and they deserve to have this put right.