PENSION GAP
Who are WASPI women and who could get compensation under ‘lifeline’ bill?
Plus the amount some say is owed for taking the State pension later
MILLIONS of women could benefit if plans for a bill offering compensation are implemented.
The Bill, which has been described as a potential "lifeline", would see £10,000 paid out to eligible pensioners.
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The Parliamentary and Health Service Ombudsman is due to issue a report on March 21 which may recommend the compensation.
In 2021, the body published the first stage of its report, which criticised the government for being too slow to inform women how they would be affected.
The ombudsman has been looking at potential injustices resulting from the decision to raise women's retirement age to bring it into line with men's.
The body is expected to publish the next parts of its investigation, which deal with those communication failings and possible recommendations on compensation.
If compensation is approved, it could cost the government billions.
But of course, there's no guarantee the Bill will be put through.
Those affected are referred to as WASPI (Women Against State Pension Age Inequality).
These are women who saw their pension age go up from 60 to 65.
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Up until 2010, women could claim their state pension from their 60th birthday and men from 65.
But, from 2010 to 2018, the pension age for women gradually increased from 60 to 68, bringing it in line with men’s state pension age.
The women affected by this say the changes were implemented with little notice, leaving them without enough funds.
The shake-up was introduced by successive governments in 1995, 2007, and 2011 to bring women's state pension age in line with men and to account for the fact that people are both living and working for longer.
In February, an MP put forward a bill calling for a compensation scheme with payouts of at least £10,000 to help out those who were impacted.
But who exactly can get the cash? And how did the issue arise? We reveal all.
Who are WASPI women?
WASPI women refers to an estimated 3.8million women born in the 1950s who have been badly hit by a change in state pension age from 60 to 65.
The acronym stands for .
The women represented were born between April 6, 1950, and April 5, 1960.
What is the WASPI campaign?
The WASPI campaign was set up in 2015 in a bid to help those affected by the change in state pension age.
Campaigners say they agree with the equal retirement age between men and women and are not calling for a return to the former retirement age.
But they say they do not accept the unfair way the changes to the state pension age were implemented with "inadequate" or "no notice".
Many women had made life plans based on when they thought they were going to be able to retire.
When this was then pushed back, it left them in financial hardship as they waited extra years to receive their pension.
Millions of women suddenly faced unemployment, zero-hours contracts and a loss of independence, according to the group.
Some of the worst affected were the 300,000 women born between December 1953 and October 1954, who were made to wait an extra 18 months before they could retire.
What are the different types of pensions?
WE round-up the main types of pension and how they differ:
- Personal pension or self-invested personal pension (SIPP) - This is probably the most flexible type of pension as you can choose your own provider and how much you invest.
- Workplace pension - The Government has made it compulsory for employers to automatically enrol you in your workplace pension unless you opt out.
These so-called defined contribution (DC) pensions are usually chosen by your employer and you won't be able to change it. Minimum contributions are 8%, with employees paying 5% (1% in tax relief) and employers contributing 3%. - Final salary pension - This is also a workplace pension but here, what you get in retirement is decided based on your salary, and you'll be paid a set amount each year upon retiring. It's often referred to as a gold-plated pension or a defined benefit (DB) pension. But they're not typically offered by employers anymore.
- New state pension - This is what the state pays to those who reach state pension age after April 6 2016. The maximum payout is £203.85 a week and you'll need 35 years of National Insurance contributions to get this. You also need at least ten years' worth to qualify for anything at all.
- Basic state pension - If you reach the state pension age on or before April 2016, you'll get the basic state pension. The full amount is £156.20 per week and you'll need 30 years of National Insurance contributions to get this. If you have the basic state pension you may also get a top-up from what's known as the additional or second state pension. Those who have built up National Insurance contributions under both the basic and new state pensions will get a combination of both schemes.
What compensation is proposed and how likely is it to be paid out?
Over the years many MPs have supported the WASPI campaign, but ministers have repeatedly ruled out any kind of concessions to those affected.
This included compensation to bridge the gap between the change in their state pension age or a one-off payment.
But now an SNP MP has put forward a proposal to force the government into establishing plans for a compensation scheme.
Alan Brown said the government should give payouts of £10,000 or more.
However, the Bill is not a sure thing and could not be passed through parliament.
The ombudsman is legally not able to recommend the government reimburse women for the full amount of pension they did not receive.
However, it can recommend that at least some of those impacted receive payments of £10,000 or more, though it is not yet known how any compensation scheme would work.
It could be due to it being tricky to work out who actually is eligible for the cash.
Some critics have said that a blanket payment scheme wouldn't be able to distinguish between people who knew their state pension age was going up and others who hadn’t been properly contacted by the DWP and had suffered as a result.
It would also be pretty expensive, running into billions of pounds.
Others don't believe the £10,000 figure would be adequate for some who believe they lost out on much more.
Angela Madden, chair of the WASPI campaign, said: "We have been working closely with Alan Brown MP and are grateful for his support in our continued fight for fair and fast compensation.
"The figure of £10,000 is in line with the findings of the cross-party APPG for State Pension Inequality for Women, which concluded that the figures outlined in the Ombudsman's Level 6 compensation scale are both necessary and proportionate.
“More than 260,000 WASPI women have died since the campaign began and this tragic statistic reconfirms the urgent need for justice for all those affected, following the repeated failures by the DWP and successive administrations of all colours.
“The Government has shown it can act to end long-running injustices within a matter of weeks as seen with the Post Office scandal. WASPI women must finally be awarded the same dignity with swift action."
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The State Pension Age (Compensation) Bill’s second reading stage was listed for Friday, April 19, but it will be unlikely to progress through Parliament without the government’s support.
It means the cash payouts are far from guaranteed, but we will keep you posted with any changes.
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