The Parliamentary and Health Ombudsman has recommended the DWP compensate women affected by its failure to effectively communicate changes to state pension age.
In a strongly worded report, the Ombudsman has called on the DWP to “do the right thing” and said it must be held to account for its failure.
However, the DWP is not legally obliged to carry out the recommendations and the Ombudsman said: “What DWP has told us during this investigation leads us to strongly doubt it will provide a remedy.”
Accordingly, it said it is “taking the rare but necessary step of asking Parliament to intervene”.
Lily Megson, policy director at My Pension Expert, said: “The DWP is playing for time that it just doesn’t have. It’s promising to respond to the Ombudsman’s report in “due course”, but if this process drags on then pressure will only grow on the government to offer suitable compensation to those affected.
“Ultimately, this case demonstrates the importance of clearer communication around pension policies. When reforms are introduced, consumers need to be made well aware of what the changes entail and how they will impact their finances. A crucial part of this – one that is so often overlooked – is opening up better pathways so people can seek out financial information, guidance and advice.
“The government may fall back on the excuse that it provides suitable warning over changes to the state pension age, but the truth is that people need much, much more support in understanding the rules that govern their pensions and retirements.
“Hopefully today’s report is the wake-up call the government needs to develop a robust strategy for improving pension engagement and education around financial planning, including the value of independent advice.”
Helen Morrissey, head of retirement analysis, Hargreaves Lansdown pointed out that the recommendations could see women compensated up to £2,950, “a decent amount but far lower than some of the sums reported.
“With this in mind it is likely that many affected women will continue to feel short changed.”
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