Compensation for women affected by the state pension age changes could be far more limited than they are hoping for, according to pensions experts.

Their plight is currently under investigation by the Government watchdog, which could recommend financial redress for the injustice they have suffered as a result of poor communication over the policy change.

However former pensions minister Sir Steve Webb said the Parliamentary and Health Service Ombudsman (PHSO) has “made it clear that he thinks it is ultimately up to Parliament to decide what state pension ages should be”.

“On this basis, it is highly unlike that any form of blanket compensation scheme will be recommended,” he said.

The PHSO has already established there was maladministration over the Department for Work and Pensions’ (DWP) failure to properly inform the women that they would not get their state pension at the age of 60. It is reviewing how much injustice they faced as a result, which will inform any recommendation of compensation.

Sir Steve, now a partner at pensions firm LCP, said: “The ombudsman has been clear that the Government let women down by failing to act on research it commissioned in the early 2000s, which found that significant numbers of women were unaware of the major changes planned to their state pension age.

“The best that the campaigners can hope for is that there may be some offer of compensation for those who can show that the failure of DWP to communicate these changes in the period up to 2010 itself caused them to lose out, for example by making decisions about retiring, which they would not have made had they been properly informed”.

John Ralfe, an independent pensions consultant, said he thought some people were being “misled” into thinking there could be “tens of thousands of pounds” in compensation up for grabs.

He predicted: “Based on the PHSO published guidelines, and amounts awarded, the compensation will be just a few hundred pounds for a few thousand women.”

The state pension age changes affected women born in the 1950s, who claim they were not given enough warning that their retirement age had increased from 60 to 65 in line with men. It then rose to 66 for both sexes.

They say the lack of notice from the DWP caused financial problems and emotional distress, the extent of which the PHSO is investigating.

Waspi (the Women Against State Pension Inequality group), which has been at the forefront of the campaign for justice, is urging the ombudsman to carry out a fair investigation and make a fair recommendation for compensation.

When the PHSO finds maladministration resulted in injustice, it can make recommendations including compensation on a scale of £100 to £10,000. It cannot reimburse women for the amount they have lost as a result of the state pension age changing.

Whether Waspi succeeds in its mission for justice will be revealed when the results of the review are published sometime in the summer.

Waspi’s lawyer, John Halford, a partner at Bindmans, is hopeful.

He said the PHSO is tasked with establishing what was lost as a result of the DWP’s insufficient communication and the impact on the women when they finally found out about their state pension age.

“If those questions are fairly confronted by the ombudsman, with his policies and past reports on similar injustices in mind, there is a real prospect of recommendations being made that begin to address the large-scale injustices at the heart of this case,” said Mr Halford.

The PHSO said: “We are confident that we have completed a fair and impartial investigation. As an independent Ombudsman, our duty is to provide the right outcome for all involved and make sure justice is achieved. Given the legal challenge brought against us, we have agreed to look again at part of our stage 2 report.

“We hope this cooperative approach will provide the quickest route to remedy for those affected and reduce the delay to the publication of our final report.”

The DWP said: “The Government decided over 25 years ago it was going to make the State Pension age the same for men and women.

“Both the High Court and Court of Appeal have supported the actions of the DWP under successive governments dating back to 1995 and the Supreme Court refused the claimants permission to appeal.”

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