Good morning and welcome to the second evidence session of the Work and Pensions Committee’s inquiry into pensioner poverty. It is a pleasure to welcome our panel of witnesses this morning. I will start from the left: Daniella Jenkins, Suzy Morrissey, Sasjkia Otto and Sue Ferns. A very good morning to you. Would you like to introduce yourselves and the organisations that you represent?

My name is Dr Daniella Jerkins. I am the representative today for the Women’s Budget Group.

I am Dr Suzy Morrissey. I am the deputy director at the Pensions Policy Institute.

I am Sasjkia Otto. I am representing the Fabian Society. It is an honour to be here.

I am Sue Ferns. I am the senior deputy general secretary at Prospect trade union.

Thank you. Could you give your views on the extent to which you think the solutions relating to women’s pension and poverty differ from those for other groups in the general population who are experiencing pensioner poverty? Daniella, do you want to kick off?

Thank you. First, I think it is important to point out that the majority of pensioners are and always have been women, so when we talk about pension issues, we are primarily talking about women and women’s issues and how they affect women disproportionately in relation to men. There are a number of reasons for why women are discriminated against by the pension system and this leads to ongoing persistent differences in pension outcomes for women and men. One of those is mainly labour discrimination within the labour market, because pensions are linked to employment, whether through gender pay gaps, employment discrimination—in types of contracts—or the work that you do, part-time work or unpaid work, which is largely unrecognised within our state and occupational pension system. The cumulative effect is that women have less to live on and the kicker is that women are more likely to live longer, so women are living for longer on less income as they get older.

Thank you. Suzy, would you like to add to that?

That women live longer is a key point. They live longer and by themselves for longer, which changes their expenditure profile in retirement. They have less retirement income for the reasons that Daniella has mentioned in terms of labour market participation. Pensions are a gendered issue and it will be great to examine that in more detail. I would suggest that maintaining that gender lens will be very important throughout the rest of the pensions work that we are doing.

Adding to Suzy and Daniella’s points, it is a common misconception that all pensioners are well off and that masks significant inequalities within the pensioner population. Women over the age of 85 in particular are more likely than most other age groups to be in poverty. The only other age group that is more likely to be in poverty are 60 to 65-year-olds, so those just approaching the state pension age who have been affected by state pension age increases. They are also more likely to be in poverty than women who are in other family stages as well.

I agree with what the other panellists have said but I want to emphasise the importance of the gender pension gap. It has had much less attention than the gender pay gap, despite being twice the size of the pay gap. As other panellists have said, there is a variety of reasons for that. One of the most significant reasons is the caring gap—the disproportionate burden on women of caring responsibilities.

You mentioned that women tend to live longer, although that is slightly changing. They do tend to live longer, but are there other issues as well to do with the depth of poverty that they may experience? Would you like to expand on that?

I am happy to come in. There are some specific nuances that affect women. One of those aspects is household finances and the distribution of finances within the household. This can affect different cohorts of women in different ways, but we see that it works its way right the way through to when we look at millennial age women, who are women born from the 1980s onwards. Sometimes it affects the distribution of finances from earned income. Income might be pooled but pensions are not. That is one issue. Divorce also has an impact. When relationships end, women may be discriminated against in the distribution of pensions. If a woman was married, it might be that the husband was building up a higher pension, but on divorce the women do not necessarily have access to that pension. We also see the impact of aspects such as caring, whether for children or older parents. We see a lot of older women caught in that sandwich generation where they might be taking care of grandchildren while also taking care of their parents, which takes them out of the labour market. The impact of unpaid work affects women’s employment patterns and further affects what pension wealth they can accumulate.

Does anybody want to add to that?

According to research that we undertook at the PPI, one third of the gender pension gap relates to labour market participation; one third of the impact is essentially due to having those care responsibilities. Only about 30% of divorce settlements currently include pensions in their financial settlements. That is not to say that funds are evenly distributed but that only about 30% of settlements include them, despite the fact that they are, of course, relationship property. There are some big impacts from these points.

Daniella, I will come back to you quickly. You have written, I think, that single older women are currently more likely to experience pension poverty. Do you think that will change for the young women who are working now?

I would have hoped so, but there are indications that these issues are both pernicious and persistent. Some of the causes for that are consistent with older generations but new nuances are coming through. It has been well established—legislation went through as far back as 1997 to try to address the issues around divorce and pensions and women—but we know that marriage rates and divorce rates are declining, so younger women are less likely to be married and are more likely to be cohabiting. Now where there are limited rights towards pensions on a relationship ending, those cohabiting women have no rights to pensions at all. We also know that there are things like economic dependence. Many women, younger women, cannot afford to live on their own. We know, for example, that 60% of an average woman’s income, if they wanted to rent a two-bedroom home within London, would be going towards their housing costs alone. We know, therefore, that a number of women who are unable to purchase a property on their own, for example, might well be in relationship living with somebody who owns that property, cohabiting for those reasons. For all these reasons we find that women may be bearing housing costs into older age. They may well not have had rights to somebody’s pension even if they had been living with them for a long time. We also find differences in employment patterns. Yes, previously women might well have stayed at home when they had children, but we also see that even single women might well be self-employed, gig working, or have multiple periods of multiple jobs, not quite reaching the threshold for auto-enrolment in pension schemes and sometimes, particularly if they are self-employed, for example, not always making contributions towards their state pensions. Certainly, from my research there are indications that some of the issues that specifically affect women might well become acute for those younger generations.

Thank you very much. I am going to move on to looking at the state pension age. We know that the average healthy life expectancy has been declining for both men and women. If anybody is not aware of what healthy life expectancy is, it is about how long you live in good health. The average across England is 61.9 years. In my constituency, it is just over 58 years. In Blackpool, it is just under 53 years. The difference in how long you can expect to live in good health is massive. Does the social security system provide adequate support to women presently in the pre-pension age and, if it does not, what do you think should change?

My overall view is that there are definitely health and inequality issues that are not currently adequately addressed within our pension system. I think that there are blind spots in understanding women’s employment and working patterns at that later point, in their 50s and towards their early 60s. A number of those women might well be undertaking unpaid work. We also have to look at what work those women who can take work, or do work, actually do. Largely, women are doing care work. They might be nursing or working in retail. I am an academic. I can probably sit at a desk until I am in my 60s, until my mind goes. However, for the women who are working on their feet, or lifting people, say, and if they do have ancillary health issues, that is much more likely to affect their ability to access benefits or be able to work in order to be able to build up their pensions.

As the state pension age increases, of course, some people would relish the opportunity to continue working and would be very happy to be seen as someone who is not over the hill, as some people might think of people reaching their 60s. However, there are significant inequalities. The state pension age increase is designed to pay for an increasing state pension. However, a lot of people will probably not live long enough to see the full benefits of that increase. There has been a significant spike in poverty in the years leading up to the state pension age. There are something like 1.1 million pensioners in poverty in total, and that has largely been driven by an increase in the state pension age over the past decade and a half. I think we can all understand why we need to think about longer working lives, but that has not been accompanied by a support package for the people affected and for women in particular. Women are about as likely as men to be disabled. We find that the vast majority of people in poverty and not working have some physical health problem. Either they say they are not working because they are ill, or they are disabled as defined under the Equality Act. However, a couple of other things get in women’s way. Some of them are barriers to work and some of them are experiences at work— work itself creating a barrier to work. Caring responsibilities are a significant important barrier to work. We find one of the main things that women say could get them back into work, if they have already left the labour market, is working patterns that are suited to their needs. The problem is that once it has got to that point it is very difficult to get people back into work. The vast majority of people over the age of 60 who are not working have been out of work for five years and that is a very steep path to returning to the labour market, so we need to make sure that people are not dropping out in the first place. What we found overwhelmingly for women—different from men, or more so than for men—is that they say that if they were thinking of leaving early, what would keep them in the labour market is a work environment that is not too stressful. We need to think about how work contributes to driving people out of the labour market and how we can improve people’s experiences at work and health at work.

A key pre-retirement benefit for consideration that we have not mentioned here and a benefit that extends past SPA would be housing benefit. We see patterns of home ownership declining and more people staying in rented accommodation through later life. We have touched on the cost of that. A key part of our considerations is how housing benefit works and the extent to which it is maintained appropriately and available for women. Our research has indicated that a further 420,000 households will need housing benefit over the coming years. That is a big increase and something to think about.

I want to make one brief comment about the increase in state pension age. I am thinking particularly about not just women caring in their families but women who are in the caring professions. That work is often very physically demanding and the workforce is overwhelmingly female. Sometimes those physical demands mean that it is just not possible to work to a rising state pension age.

To the point about there being no support packages, if people cannot keep working for whatever reason because of the barriers they experience to work, we need to think about the benefit system. Universal credit is worth about one third of pension credit and people are in poverty as a result. We need to think about how long people have been out of work, their health, whether they have had caring responsibilities recently that meant they had to leave work, and whether we need to smooth the transition to the state pension age by raising working age benefits for certain people.

I have a final question. The Government postponed the review on pension adequacy. What do you think the review’s focus should be when it does happen? Who wants to kick off with that one?

I am happy to take that. We are looking forward to the second part of the review when it does happen. We have always looked at pensions as part of the social system, not in isolation, and that has become more so nowadays. We have mentioned health and housing. It is very difficult to view pensions in isolation from these other aspects. What will people need to spend their money on? Social care is another aspect of that. From the PPI perspective, it would be great if we could look at the issue of pension adequacy in the round with all those other issues that we need to consider, making sure that we are considering individual needs. Needs will not be the same across the country. You have mentioned differences in life expectancy. Differences in expenditure for heating costs depend on where people live. There are all manner of variables to consider. Taking that lens of intersectionality would be a very good way of proceeding.

We need to consider what the state pension is for. At the moment, the state pension is set around the poverty line—a little bit higher maybe; the latest data we have is from 2022-23—but it cannot guarantee protection from poverty for a couple of reasons. One is contribution rates and the other is housing costs. Although it is set at the poverty line, it is the poverty line before housing costs, and housing costs include things such as water rates, council tax and insurance. First of all, we need to think, “Is there a minimum standard of living that every pensioner should be guaranteed in retirement? What is that standard of living? Should it be the poverty line or some other factor that takes into account essential expenses?” Then, how do we ensure that people reach that level? Do we have to do things such as relax contribution rules, for example, or potentially set a target that the state pension needs to reach? The over-85s are the ones who are most likely to be in poverty. Our research finds that extending the new state pension to everyone, no questions asked, is not that much more expensive than giving means-tested support to everyone. Of course, it is very difficult for means-testing to reach the over-85s for a whole bunch of different reasons.

At Prospect, we think there should be a major focus on the gender pension gap. That is partly a pensions policy issue, but it is also important to look at the related policy areas in the labour market, caring responsibilities and so on. We would like a review to look at the position of freelancers in the labour market, where pension provision is dire. We represent about 30,000 freelance workers. Often, they are on contracts that are so short that they cannot even be automatically enrolled before that contract ends and then they move on to another one. Given the growing numbers of freelance workers across the economy, this is going to become a more and more significant issue. I do not think that it has had very much attention.

That is a very good point.

We have heard this morning that a woman’s journey towards being less well off in retirement is not one that suddenly becomes an issue at pensionable age. It is a journey through a woman’s life. Caring responsibilities are particularly pertinent. I think of my own constituency, where that is very much writ large around me. The journey towards poverty in later ages starts very early on and happens along the way. I am interested in how we measure the gender pensions gap. Is it currently possible to identify which women may be at risk of pensioner poverty and who should be prioritised much earlier, taking into consideration what we know from existing data? If that does not exist, how could we produce that information to help us?

Our recent research shows that the women who have the lowest retirement incomes are those women who have experienced single parenthood at some point during their early life or have experienced divorce in earlier parts of their life course. Those two things can go together. These elements of things that can happen to women are key indicators of their later life outcomes. If you want to think about targeting or the cohorts that you might want to think about, these are the women for whom retirement incomes are currently much lower than average. Part of that might be about settlements but I also take the point about women who were not married. These are the women you might think about.

The caring point is very important and it is important to recognise what the spectrum of care looks like. Care is childcare. Care is looking after parents. Care is looking after people with disabilities. Care is taking care of your child who perhaps has been excluded from school. Women tend to do all that unpaid work, which is partly taking them out of the labour market and partly affecting their ability to be able to build up. It is equally important to recognise that not all the women caring in those ways are recognised as carers within the system and able to access benefits. That is a vulnerability. They are not seen. Gender pay gap reporting is extremely important, but it is also important to recognise that a number of the freelancers who we are talking about, for example, are not captured. We know that work is happening at the moment looking at workers’ rights and how they affect how people access things like auto-enrolment. At the moment, those workers sit within that grey labour market where reports do not pick up people who are working on contracts that do not bring them into auto-enrolment. However, I think the biggest factor, the blind spot, is around wealth and wealth is linked to intergenerational inequalities. We know that intergenerational wealth will make a huge difference, particularly for the millennial-age population that I have studied. If your parents owned a property, you are going to have very different financial outcomes than if your parents did not. We must recognise that there is a generation of people who are super vulnerable and that they are going to need pensions much more than people who will have property wealth, whether that comes from their parents or from their own ability to be able to access property wealth. It is important to recognise that some people are going to rely on their pensions much more in older age and we need to identify who those people are much earlier in their life courses.

Are you aware of any existing data that is looking at these groups now?

No. I think that the issue around intergenerational wealth transfers and inheritance is effectively a blind spot. We do not look at it and we do not understand it. We look at income but we are not necessarily comparing like with like. We must recognise that their parents’ financial and social status has a material impact on people’s own financial outcomes later in their lives.

I do not pretend to be an expert here, but I do have a little bit of a background in data and policy. HMRC will have data on pensions contributions. The pensions dashboard, when that materialises, will also bring together data from different pension pots. Of course, HMRC will have data on earnings and how much of their state pension people have accumulated throughout their lifetimes. There is a different piece of work to be done on how you bring all those different pieces of data together and what you do with it. It is all very well to say you have a bunch of people who are going to be living in poverty in retirement or below the minimum income standard, which is the standard that the public think is acceptable for someone at a certain life stage, but perhaps targeted intervention is required. If you know who those people are from bringing these different data sources together, maybe you need to think about whether you need to let them know that they need to save more. Or, if it is not realistic for them to save more because they are already on a low income, are there other interventions that the Government can come up with early on to make sure that we are not in this same position 30 years down the line?

It seems that there is potential for a much more proactive approach. If we know now, all these years ahead, that this is the trajectory that somebody is on, the potential appears to be there to be able to do something about it much earlier.

Correct, but I want to caveat that by saying that I have not done any detailed research on this and it is a whole new piece of work to be done.

All right. Thank you. That is really helpful.

I want to make a slightly different point: however you measure the gender pension gap, and there are different ways of doing it, the results are broadly consistent. One thing that Laura Trott did as Pensions Minister was to publish a Government view of what the gender pension gap is. This must not be a one-off exercise. The Government’s measure, as it was then anyway, is derived from data that is published biannually. We would want to see the gender pension gap published at least biannually and published to Parliament, alongside targets for reducing the gender pension gap and a plan about how we think that can be achieved. That is important for some of the points you have been making because so many people, so many women, are unaware of the trajectory that they are on. If we have a figure, we publish that figure and we set targets, that is a good way to bring it to wider attention as well. It is in some ways very straightforward, but it is not happening and it needs to happen.

Much more focus and granularity. Thank you. My colleague Johanna Baxter wants to come in.

I should declare before I go on that I know Sue Ferns because we used to work for the same organisation. It is helpful, Sue, that you have said that one of the lessons from the gender pensions gap and the report that was published is that the report should be published more regularly and that there should be targets. However, I am conscious that you have estimated that the gender pensions gap would not be eliminated until 2088. Do you want to say a little more about how you think we could bring that down?

We said that based on current trends and what is happening at the moment. A number of things could help. The first is to do with caring responsibilities and giving credit in the pension system for women with caring responsibilities. There are also things that employers can do by giving pension credit to women on maternity leave, for example, or parental leave. We need better rights for cohabiting couples, more pension sharing orders on divorce, and better provision for surviving partners in DC schemes. We have, of course, in recent years seen that shift from DB, where survivors would automatically be entitled to pension benefit, to DC, where it is much more a matter of choice and it does not happen automatically. Those are a few things that could happen, but I think that the Government should also look to the public sector. There are some very big employers in the public sector with even bigger pension schemes. We measured the civil service gender pension gap at 44%, for example. I think that the local government pension scheme is currently the only one that is addressing this actively. There should be a recommendation and a requirement on those major pension schemes to do some analysis and to take action to narrow their pension gaps.

How frequently would you expect to see the publication of a report on the gender pensions gap?

I think at least every couple of years. Regularity of reporting is what is most important. Certainly, when you think about the public sector schemes and their scheme advisory boards—these are unionised workforces—there should be discussions taking place at least biannually in the same way as organisations are required to report on the gender pay gap.

Thanks so much; it has been fascinating so far. In terms of financial resilience, it would be useful to understand the financial resilience between men and women at pensionable age but also at that pre-pension stage. I was wondering how many women are reliant on state pension as their main source of income and how does that differ between men and women.

More women than men rely on the state pension as their main source of income—I am picking through my notes to find it; I think it is 67%—but more women than men are reliant. That is a key piece and it speaks to the reporting that we were talking about before because that would need to talk about the pensions gap within private pensions but also in public pensions so that you could see the impact of the changes that have been made with respect to care credits coming through. The financial resilience and broadly financial capability piece is an interesting one. It is quite gendered. We know that women often run the household budgets and have a lot of financial skills, yet sometimes when we start to talk about things with different words, like investment and other things, that can start to feel a less comfortable space for women. That is not to say that they do not have skills that can be employed in that area. As with anything, it is very much about how you pitch that. The resilience capability piece is worth exploring to think about how we are messaging conversations. To the point, if we have identified some cohorts that might benefit from specific assistance, we would need to make sure that the way we are communicating with them would be in ways that resonate and work with them. As ever, just having a gender lens over any of those points would be useful.

I think it is important to make that link between working life and the life that you live as a pensioner, for example. That does affect different cohorts differently. It is important when we recognise pensioner poverty—and many of the women who are pensioners at the moment are women who were working in the 1970s and 1980s. These are not periods of time that were particularly well known and renowned for recognising women’s rights within the workplace. A number of those rights came in from the late 1990s onwards. We recognise that a number of those women are now paying the price for the discrimination that they faced within the labour market at the time. A number of women were excluded from occupational pension schemes. It was not that they did not make the choice or that they did not know. It was not until 1997 that it was outlawed to ban women or people—mainly women—from joining occupational pension schemes because they worked part time. We also know that the most generous pension schemes still tend to be associated with industries and occupations that tend to be dominated by men. Given the fact that women tend to work in lower-paid roles, they are earning less and they have less generous occupational pension schemes. As you say, there is that reliance on state pensions, because women were less likely to have or be able to build up these generous occupational pension schemes. That is one of the reasons why they are now subsisting, living on the state pension or reliant on that state pension, because they did not necessarily have those opportunities to build up good occupational pensions at the point at which they were working.

Just to add to the building-up point, our research finds that women who are not working and living in poverty also use their occupational pension to tide them over until the state pension age. They are more likely than men to draw their pension early. An interesting thing is that this sometimes comes at the expense of claiming the benefits that they might be entitled to because pension income is offset pound for pound against benefits. If you claim a pension you cannot get the benefits for that amount. I think that there is a lack of information in that space. A lot of people are using—both men and women, but women more so than men—their private pension to get them to the state pension age, even if they are living in poverty and cutting back on how much they spend, rather than going out and getting more work, which comes with the challenges that we just discussed.

One thing in the paperwork that we received was that poverty increases as pensioners age, but clearly that is partly because women live longer, so there are more of them in each group as they get older. I thought that was interesting. In terms of the state pension being the main income, how does that deliver against adequacy benchmarks for income in retirement?

The full state pension is only just meeting the PLSA retirement living standards. We have talked about it previously as offering a minimum amount, and obviously individual circumstances will depend on the extent to which there is private pension income alongside that. Currently, that is where the state pension is sitting as an accepted—if that is indeed the case—minimum standard.

How does it vary for different groups of women—for example, by age, for those who are single at the point of retirement or for those who become single in retirement? Picking up the point that Daniella made on intergenerational wealth too, how does that vary for different groups of women in terms of the pension being their main income and the way in which poverty increases as people age?

I do not have this report, but I know who does. I just didn’t bring it with me, so I might provide you with a reference afterwards.

Certainly, we have evidence about the lower income in retirement of women who have experienced those incidents, such as single parenthood and divorce, in earlier life. We know that those women are the women who have lower incomes in retirement. I do not have the retirement age data for you today.

The triple lock has done a fantastic job of raising UK pensions to more or less the middle of the pack since it was introduced under the coalition Government. However, it is at heart just a mathematical formula. Do you think it is still the right mathematical formula? Or do you, for example, think it needs some social objective added to it? Sasjkia, you partly answered that earlier, so perhaps you would like to start.

The UK Government spending as a proportion of GDP on pensions is very low by international standards. My answer to your question is a values-based question that the Government need to answer. The Turner Commission set a target for the state pension of 30% of median incomes; that has been reached now. However, the state pension cannot guarantee protection from poverty and retirement, first, because of contribution gaps and, secondly, because of housing costs. The Government need to take a view whether the state pension needs to be increased to make up for those things to a point where pensioner poverty is addressed more extensively or whether there are other mechanisms to address pensioner poverty. I would say that you would have to raise the state pension by quite a lot to get to all renters—I can get you the figures in a second. Even if you raise the state pension to the minimum income standard, which is higher than the poverty line, of the people who are renting, something like a quarter would still be living in poverty. A universal level of support that everyone is entitled to is still not going to get people above the poverty line or to a decent standard of living—not everyone. Is there a role for cost of living support? Do Government need to look at how we support people? What housing reforms do we need to take into account? The IFS has made an interesting proposal on the bedroom tax. Of course, the bedroom tax is not applied if you are living in socially rented accommodation, but if you have more bedrooms than is deemed suitable for your household size in private rented accommodation, you get a housing benefit penalty, so we could maybe look at something like that as well. There is a detailed process you need to go through. My research has not made that recommendation. You need to take into account things like private pensions as well. However, the effects of private pension reforms are going to take decades to feed through. At the moment, the lowest earners still are not saving enough, and that is not going to happen overnight. That is going to happen over 30 years’ time.

The triple lock is obviously one way of protecting the pension from inflation, but there are other mechanisms that could be used. That would be a political decision as to which one you chose to take. The key thing is to ensure that it has a level of inflation protection. From a policy perspective, there is that question about what you want the state pension to do, the extent to which you think it should be able to cover all those expenses, or whether you are happier with an approach that provides layers of targeted specific additional support for additional costs. Housing is one; energy costs are another. Taking an approach like that allows you to direct that expenditure precisely to those people who are incurring those specific costs and may not have the income to meet them rather than using the state pension to do it, which is a blanket approach by which everyone is raised. It may not be that everyone who is in receipt of the state pension needs that additional income.

Just to say again, over-85s and over-80s are at a greater risk of poverty, and there is not much in it to just give everyone a new state pension regardless of contribution rules. You can lift quite a lot of people out of poverty and the cost would be very similar.

Colleagues are more expert on this than I am, but I am mindful of the potential tension between targeted or means-tested benefits and the drive to automatic enrolment, particularly if putting more money into a pension has implications for your income and therefore your eligibility for means-tested benefits. There is a potential tension there. Of course, means-tested benefits are under-claimed as well, which is another issue to think about. Even for those who do claim them, it does not necessarily take them out of living in poverty.

One thing that we should all recognise is that the triple lock has helped pensioners—really helped pensioners—and has improved what was a deeply inadequate state pension for a number of years. Successive Governments should be congratulated for maintaining that, recognising that the majority of pensioners are women. We are lifting a number of women and putting them in a better financial position than they would have been otherwise in old age. I think the point that Sasjkia was making may have been lost, but we should recognise that, even with an increasingly generous state pension, a number of women do not get their full state pension, partly because that is linked to employment patterns and working patterns, and partly linked to some of those older women having a dependence model—you were getting your stamps through your husband, for example. That has affected women, so they are living with the legacy of those policies now in older age. There are questions about pension credit and the eligibility, how that interacts and whether that is the right mechanism, and about things like the savings credit element of pension credit, which was taken away as the triple lock came into play. Again, some women are affected by that and the cliff edge that happens, so you either get pension credit, and that opens up lots of other things, or you do not. The difference that that makes is so significant and that does affect a number of women. We need to think about how the state pension interacts with other benefits, such as housing benefit or pension credit, and whether there is the possibility for tapering eligibility for things like pension credit as well. Rather than, “I make the threshold, yes! I have it!”, it could be, “Could I get a bit to help me through?” Equally, we often talk about means-testing, and there are horrible legacies—horrible legacies—around means-testing. People are quite rightly suspicious about people having to prove how poor they are. People do not want to do that. People are proud; they do not want to have to go cap in hand. Maybe they were not claiming benefits when they were at working age, so why would they feel the need to do that now? There is £1.5 billion unclaimed in pension credit and some people who may never want to do it in that form. One of my arguments is that I have to pay back a student loan, but I do not have to go and ask and knock on a door. We have the mechanisms to work out eligibility in working age. We should be able to extend those and to change that—to change the burden of responsibility for people having to step into the system. We should be able to bring them into the system and recognise that need.

On benefits take-up, it is worth noting that the level is so low that even if every single pensioner claimed the benefits they are entitled to, which is a very steep hurdle, you would shift pensioner poverty by one or two percentage points.

Good morning. You will be pleased to know that we are now steering straight into means-tested benefits. I am sure we could have a lengthy session on the merits and challenges associated with means-testing benefits. However, I am keen to draw out a wee bit more from you on some of the points that you have mentioned this morning around the effectiveness of the means-tested system in preventing women at pension age from falling into poverty and what you would prioritise to make that more effective. Daniella, I will start with you.

One of the things to again bring out is that pension credit is not just about getting pension credit, it is about some of the other things that it unlocks as well, like the TV licence. There are lots of things that are linked to pension credit. It is almost like winning a prize if you do get into that system. Recognising that so much hinges on pension credit, if that continues—and again that is a policy decision—then there is an onus to bring as many people into that system as possible. At its most basic level, it is about information—letting people know and understand. You may not think of yourself as somebody who is eligible for pension credit, and I know that there have been recent campaigns around that, but equally we must allow people to be able to make calculations that are reasonable and that are easy enough for people to understand. It is still quite a complex system. Examining again that intersection between things like savings and pension credits, it is worthwhile revisiting that and some of the assumptions around that. I do recognise the logic at the time; if the state pension gets more generous then fewer people would need pension credit. Again, a number of people have mentioned housing. We can see that a lot of the assumptions around the pension system—going back 20 or 30 years—were that by this point in time, we would all be homeowners, so by the time you got to old age you would not have mortgage costs, for example, or renting costs. Equally, you might be able to unlock other things because you own a property. We know that we are looking at generations of lifetime renters—not lifetime people on housing benefit, but lifetime renters. We need to be able to understand how housing costs are covered throughout the life course, for example, and how that intersects with pension credit and other forms of benefit as well, because that really has not been examined.

Housing benefit interaction is probably the key area for consideration. The other area is social care and when you start to get into those specific needs for a higher level of accommodation. Those are a couple of key areas where means-testing applies and has a great impact on pensioners overall, but women in particular.

Couples on an equivalised basis receive a much lower level of support than single people. One of the earlier things you can do to lift pensioners out of poverty is to raise the level of support for couples to the equivalent of what single people receive, controlling for household size. Even then, linking with what has been said on poverty and home ownership, you are going to end up with 27% of private renters, 21% of social renters, 14% of people with a mortgage, and 11% of homeowners still in poverty if you do that. Take-up is important, of course, alongside considering the levels. We need to consider data-driven approaches for promoting take-up. Again, this is a whole other piece of research, and I know it came up when the Secretary of State gave evidence on this last year. I would be very interested to see a more detailed analysis of whether the Government’s existing Notify system, which is what was used to send text messages to people during the pandemic, could be used to let pensioners who might be eligible for pension credit know, because that is quite an accessible format. I know that there is a conversation ongoing around the automation of benefits uptake. I just want to—not caution about it; I am very enthusiastic about the opportunities presented by technologies—but we submitted a freedom of information request to DWP and found that 100,000 pensioners are on a debt repayment plan to DWP. If they are living only on the state pension or on means-tested benefits, that is going to put them into poverty. If you are automating benefits uptake and there is a mistake, that is going to erode trust. It is going to potentially put pensioners into debt. You would need access to people’s information on household savings to do that, which, of course, is information that is held by banks. One thing that the Government might consider doing, and there is already private sector technology on this, is explore with banks whether they could let people know, based on their account information, that they might qualify for benefits. There is a lot of opportunity for innovation here.

I have nothing to add to what colleagues have already said.

If I could maybe focus on what you, Suzy, mentioned at the start of the session specifically around housing benefit. We know the importance of housing benefit linked to, for example, women fleeing domestic abuse and those with caring responsibilities, as highlighted earlier on. We also know the Government are committed to trying to improve the administration linking pension credit to housing benefit. I am keen to maybe get some more information out of both of you, Suzy and Sasjkia, around how effective housing benefit is in supporting those women who are of pension age and if there are any specific steps at this point that you could say that the Government could take to make that more effective.

I think a key area is the accessibility of being able to apply and get those credits. It speaks to the system as a whole. Once we give a lot of our personal information with respect to one benefit, say housing benefit, it would be great if we were able to use that information for other things that we might be entitled to, rather than having to have another appointment with another person to tell them the same things to get access to, for example, some other form of support, like attendance allowance or whatever it might be. There is something about taking a holistic picture when someone comes into the system asking for a particular benefit or if we reach out to an individual on this. There is also something about how the system can work as a wraparound, recognising that, as you said, once you are into pension credit there are a number of other things that you could get. I think housing benefit could be one area where we start to open that door. I do not have any more specific data for you today, other than that we know that it is a valuable benefit. We know that we expect more and more people to need it over the short term, and I think it presents a clear opportunity to engage with the system in a way that people who have not necessarily engaged with the welfare system over their life course might not be used to doing. Going on to the state pension is a relatively easy way to access welfare provision, and they might not be used to the other ways of doing it. We also need to be quite mindful of individuals when we are doing that. I know that there are a number of people for whom a technology-driven approach would not necessarily support them as they get older and have greater requirements. That would be the other thing that I would just add there. As with everything in life, there is a range of ways so recognising the diversity that we all bring to the situation would be important.

There are two issues. One is the level; another is take-up. Of people who receive housing benefit, 250,000 single women and 100,000 single men do not receive the full amount of rent. That is for a variety of different reasons, including, as I discussed before, the private sector bedroom tax. We also modelled what would happen if everyone who is entitled to housing benefit claimed it, and you would get 70,000 single women and 40,000 single men out of poverty. I think it depends what you are trying to achieve with any means-tested or other intervention, such as whether you are trying to get people out of a specific poverty threshold. There are also different measures of poverty. There is income-based poverty, which is the Government standard measure, which is 60% of the median after housing costs. That is what people generally use, but the Government are also developing another measure for households with below average resources, which takes into account the cost of care, energy and so on. If you are just taking the current standard measure, you have council tax, water rates and a bunch of other stuff that is included in that measure. I do not know if it is that helpful to think about just that or to think about the cost of living more holistically. This is a tricky one. It is very difficult to get it right and it is very difficult to target. If we think about the way that housing benefits say that someone’s income should not drop below a certain level after housing costs, assuming a reasonable level of expenditure on housing, is there a similar principle that should apply to utilities and can that be co-funded by utilities companies? Then, of course, there are other things you need to think about, like whether that cost will be passed on to other people. Cost of living is so important. We have done focus groups and we found that, more than income, people at all ages feel the impact of cost of living. I think that is what the Government need to think about. In addition to benefits, what can they do structurally in the long term to address cost of living challenges? Is there near-term support that should be targeted at specific people?

I think I have about two and a half minutes for these questions, which are on WASPI women, who are clearly mostly now into retirement. I am going to ask both questions because otherwise I will be guillotined.

You won’t, Steve. Carry on.

The first one I wanted to explore was levels of poverty among WASPI women—that cohort of ladies. You have already talked to a certain extent about this, but some application around that area would be helpful. The other area that I would welcome some exploration of—some of it we have already touched on—is the cultural issues for ladies of that age. You have already alluded to that perhaps—well, you have hinted at it—but is it reasonable for me to assume that perhaps it was the male managing the finances within the household so women of that age are perhaps less confident around managing finances? That is a big assumption. I know there are very capable women of that age who are perfectly able to manage, and manage much better than men on many occasions, but it is those cultural pressures around that world that may have impacted on people’s ability to take account of the changes that the ombudsman found maladministration on.

I am happy to start with that. I do not have full data on the WASPI women, specifically how many are living in poverty. However, I do know that women make up more than two thirds of pensioners currently living in poverty and 50% of pensioners in poverty are single women. Again, it is about targeting and thinking about those women who are single, who we know are disproportionately affected. Interestingly, in relation to WASPI women, it may not be the right forum to say but my mother is a WASPI woman. She was born in the 1950s and I knew that she was a WASPI woman before WASPI was a thing. We did not have a word for it. All we knew was that there was a problem with her state pension, and for her friends and her family. My mother worked in the public sector her whole life. She worked in the NHS; she taught. The decisions that she made—whether it was not working because she was taking care of children, not working because she was taking care of family members, working part-time so she could be there when we came home from school—were not necessarily about knowledge, about finances, but because she was not thinking that by the time she got to that stage in life she would suddenly have to take account for all those things. She said that she was unusual in that she went to work. It was expected that once she had had children she would be at home. I think that for a number of those women, it is not just that they did not understand about finances. We put a lot of that mental burden on them, but we should also think about the choices that they made throughout their lives that led them to the point where they were caught out, effectively, because the other decisions that they had made previously suddenly crystallised at the point when they needed it the most.

Similarly, I do not have data on WASPI women, but suffice it to say that it has been great to see the changes that have come through in those NI credits and contribution needs that will support future generations of women; that is great. For those women who have been captured by the issues related to the WASPI women and the changes, that is an area where it is important to look at individual circumstances and support people as they go through.

Coming back to the point, we have an ongoing process of state pension age increases and there is an opportunity to put in place a support package for people during those years leading up to the state pension age. The poverty rate for people just after the state pension age, up until the age of 70, which would be WASPI women, is fairly similar for men and women. I do not have the data on the two-year period of people who were particularly affected by delays in notifications of the state pension age increase.

That concludes our questions to this panel. Thank you for the insightful information that you have brought to us. We will now move on to the second panel. Thank you so much. Witnesses: Angela Madden and Debbie de Spon.

It is a pleasure to welcome our second panel, who are representatives of the WASPI group: Debbie de Spon and Angela Madden. Thank you so much for joining us. Would you like to introduce yourself very briefly, please?

I am Angela Madden, and I am the chair of the WASPI campaign.

I am Debbie de Spon, and I am the communications director for the WASPI campaign.

Thank you. I am going to hand over to Steve Darling for the first question.

Thank you very much for making yourselves available today to come before the Committee. It is appreciated. The ombudsman found maladministration when he explored this area. I just wondered if you could unpack for us how this impacted on WASPI women. The other area that I would be grateful for you to unpack for us is whether it had a different impact on different sectors of WASPI women in your understanding of the challenges that your group face.

I will start with an overview of where we are now. It would be fair to say that WASPI women are angry after the response to the ombudsman’s advice, and not without justification, because we worked and we paid national insurance and we looked after children and we cared for our elderly relatives. Many of the things that Daniella referred to today will resonate very closely with WASPI women’s experience. We approached our retirement and found that the Government increased our state pension age by up to six years and, if that was not enough, they did not tell us that they were going to do that. Our campaign has never been about the loss of state pension, it has been about the lack of notice that women received and the impact that that had on those women. We have campaigned for 10 years, so it is our 10-year anniversary, and six of those were an ombudsman’s investigation. We awaited the result and we were exonerated, so we were very delighted. The ombudsman found that there had been maladministration; however, the DWP does not accept the findings. WASPI women are upset and angry and they feel let down and they feel betrayed. They do not understand how it is possible that findings of maladministration have been shown but do not lead to redress for them.

On the impact of maladministration, what happened, as you know, is that we are all women affected by the same injustice, but you are right that it affects people in different ways. Numerous women who worked maybe full time had given up work to care for elderly relatives. “We did plan for our retirement”—is mostly what we hear from our members—“but we expected that retirement to start at 60.” If you have already given up work in your late 50s or maybe your mid-50s—depending on what your circumstances are— it is very difficult to get back in four, five, six years later, or whenever you heard about the law changing. I believe that certainly for us there was discrimination in the workplace, and I believe age discrimination still exists in the workplace. I heard the earlier panel saying that people get into poverty while they are waiting for their state pension now in their early 60s, and perhaps that is because they cannot get the same level of work that they got when they were younger—who knows. Skills lapse; a nurse’s accreditation runs out after two or three years, and if they thought they were retiring forever, they did not renew it. Then to renew that after a gap is very difficult for them. Many people had to take more poorly paid work during those years, if they could get that work, to get by. Some people were lucky enough to have savings. It was a huge level of retirement income that we lost—£50,000 in some cases—and many of us had to use our savings or, rather than helping our families in the way that we would have liked to, our families had to help us. That felt demeaning. The women who had those assets, like their savings or perhaps houses, perhaps had to sell their houses and move into rented accommodation, which then has a huge impact on their lives in the future. We have heard of some women house-sharing with strangers. We did that when we were students. We certainly did not expect to do it at this stage of our lives. Women have been impoverished by the way that we have been treated. We are now shocked again because the ombudsman suggested that we were being compensated for the stress, the lack of notice, the anxiety, the shock, all the adjustments that we had to make, and some that we could not make, but the compensation recommended is a very small sum because of that—£3,000 maximum for anyone suffering from those injustices. That adds more injury to the injustices we have already suffered. Our campaign has always been about securing the redress for injustice, not about returning the lost state pension.

Thank you for joining us. You have already mentioned that you have been campaigning since 2015, so it is fair to say it has been a long road. We are under a new Government and the DWP under that Government has accepted the maladministration and committed to learning from it, which I think when we look back at some of the stages before would seem to be a development. I wondered what you thought about this, bearing in mind that previously the DWP did not accept that there was any maladministration. Is it a significant development to have that acknowledgement?

Yes, we welcome the acknowledgement and the apology, and we also welcome the fact that things will change in the future, but it is too late for WASPI women. The damage has been done for us and the redress that we are seeking is an acknowledgement for the stress and worry. For the women who found out with very short notice that they were not going to be receiving their state pension, it put their retirement plans completely into turmoil. Women report to us the distress that it has caused them. That is what the compensation is for. It is right that the Government consider how things could improve in the future, but for us it is too late, the damage has been done.

I would like to just build a bit on that—about the DWP disagreeing with the PHSO. One of the questions I have to ask is: when did it disagree with the PHSO? Because its evidence in 2005 said that it decided that letters should be sent to women affected at that time because it knew that a majority of women did not know about the change to their state pension age. I think that referred to a 2004 survey where at least 50% of WASPI women whose pension age was changing from 60 to 65 still thought their state pension was 60. It had evidence at that time that it relied on, and the ombudsman agreed with that evidence and noted that it did not act on it quickly enough. Even though that decision was made in 2005, it still did not start sending letters to women until 2009. It could have started sending them much earlier. Some women could have had nearly four years more notice than they got from the DWP, according to the ombudsman. That would have given them a lot more time to adjust their retirement plans. For me and others, that additional notice would have meant that I might not have stopped working full time to care. I might have chosen to share caring with part-time working. Of course, the PHSO and the DWP say that decision does not lead to direct financial loss, but the result of that decision has a huge impact financially. If I had had that extra notice, it would have saved me a lot of money, but I lost the opportunity to make that decision. That is what lost opportunity means here. It is not something like missing out on going to a concert or missing a birthday or something. It is an actual decision that made an incredible difference to your life.

If I could follow up quickly, you have spoken about how you feel that women lost quite significant amounts of money as a result of the maladministration that is clearly there, as has been recognised, and that that must not happen again. The amount that the ombudsman has recommended is a fairly small amount. I wondered what your thoughts were on the impact of that broadbrush approach to support those women who were particularly left financially worse off.

When we spoke at the Committee the last time—of course, some of you were not here then—we spoke about an additional process for claiming if you could prove that you had had significant financial loss. The Committee agreed and wrote to the Department for Work and Pensions at the time asking for this two-pronged approach. What the ombudsman recommended was about everyone who had suffered from the injustice, and suggested a rules-based system for that, but then for that to run alongside an application-based system, which would not be overly onerous but would allow people to prove that their financial losses were greater than the report went into.

That is in addition to?

That is in addition to, yes—running alongside a more complete rules-based system.

For some women, £1,000 or up to £3,000 compensation would make a big difference to them. Even though it does not cover what they might have lost, it is an acknowledgement that there has been maladministration and an acceptance of that. We feel disempowered. We feel that we are being airbrushed out of history almost: “Move on. We have done the WASPI issue.” But it has not been resolved as far as WASPI women are concerned by any means.

Thank you for taking the time to come to see us today. I want to turn to the issue of communication because a lot of the discussion has focused on letters and whether sending letters at an earlier stage would have had a material impact. What is your view on that?

Sending letters is vital. There is this question of whether women would have read the letters. If you have a letter and it came in a brown envelope and it said, “This contains significantly important information about your retirement future. You must read this,” it would have been different. It would have been different, too, if the letters that we had been sent had included detailed information so that women were clear about the implication for them, or if the letters had said to them, “If you are not sure about this, make inquiries. Contact the Pension Service.” A lot more could have been done with those letters. We do not agree that women would not have read the letters. If women had not read their letters when they started to be sent out in 2009, there would not have been a WASPI campaign. DWP has sent out letters to millions of people about the removal of the winter fuel allowance, so presumably it acknowledges that it is a worthwhile exercise when trying to communicate important information to people.

Given the information age in which we live, are there better ways of communicating that might be different from or in addition to hard copy letters sent by snail mail?

Absolutely. We live in an electronic age and many women use modern technology, but many WASPI women do not use modern technology. Some of them have trouble copying and pasting a letter or accessing those services. There needs to be a variety of communication channels but, crucially, the letter is essential with all the information that you must do something about. The advertising campaign that happened was vague. It was not specific about the increase in the state pension age. Otherwise, far more of us would have known. Crucial information, which is given clearly in a variety of ways, and which is accurate and up to date on the website and that kind of thing, would be right.

Playing devil’s advocate, given what you have said about the campaign being “vague”, might women have done any other questioning of the Government at the time?

At the time, up until 2016, the landing page of the Government’s DWP website stated that women’s state pension was 60 and men’s was 65. Ros Altmann changed that when we told her about it because that was part of the evidence that women used. As Debbie said, we were not that computer savvy, but when we saw it on the official website, yes, we believed it. Some of us were fortunate enough to be in Government-owned companies with pension schemes. I worked for the Post Office until 2004 and I had a benefit statement from the Post Office pension scheme saying all the benefits in that scheme were in addition to state pension benefits. A lot of schemes operated this clawback position but, of course, the Government-owned pension schemes did not. Plenty of information was out there for people to tell them that the state pension age was 60. Yes, maybe they could have done more. There were emails at the time, so maybe we could have got emails. We certainly read emails, especially from official sources. Maybe tomorrow’s pensioners should start using text. We find most of our women now have mobile phones, not necessarily laptop computers or desktops or anything like that. Harvesting that generation of mobile phone users is perhaps a better way of communicating for the future, but we did not even have mobile phones in our day so that would not have worked either.

It is quick now. We know that most of our supporters follow us on social media and pick things up instantly, but it was not like that, so the damage was done then. Moving forward, it will be different.

Going on to the PHSO’s approach to remedy, the Government have argued that a compensation scheme costing up to £10.5 billion cannot be justified in the circumstances and that a scheme based on individual circumstances would take many years and require thousands of staff to process. What is your view about that dilemma?

They have talked about it not being good value for taxpayers. We recently surveyed adults in a statistically sound survey conducted by Yonder on our behalf among 2,079 adults. The survey was between 3 and 5 January 2025. We asked if the Government should follow the ombudsman’s recommendation to compensate WASPI women. Some 74% of that population agreed with that statement. People aged 18 to 65 made up 77% of the 2,079, so 70% of working adults today say the Government should afford it. They should pay us back. That is down slightly from 74% if you include pensioners. Of course, that argument also flies in the face of the ombudsman’s view that the availability of resources should not be a barrier to compensation. Resources have always been tight. It is difficult for the Government to make these compensation schemes but, with respect, that is the job. The Government are in the job of fixing things that have gone wrong. There have been other large-scale compensation schemes in recent years. For example, “Trusting in the Pensions Promise” was about a similar complaint to ours. That was about a lack of or incorrect information, which was judged to be maladministration, and the resulting injustice was remedied by financial payments. A total of £12.5 billion was paid out under that scheme and I am sure times were difficult then. It is not fair to say, “Because we are in a mess, you have to pay for it, even though you have already suffered and have already had injustices.” What is the point of having a process where we can complain if our rights have been violated if the Government then say, “No, times are tough”? It is not good enough.

We are mindful, too, that the Government saved over £200 billion by increasing the state pension age just for WASPI women. The amount of compensation that we are asking for is a tiny fraction of that, acknowledging that there was an error and as redress for that.

I was trying to pull out the tension between a blanket compensation approach and something individualised, which might be long and difficult. Do you have any thoughts on the two? They are quite different.

Yes, the direct financial loss would require women to provide some evidence. The original scheme that we talked about previously when we spoke to the Committee was that it should be a simple flat rate of payment related to the amount of notice that women had of the speed of rise in their state pension age. We think of it rather as a bell curve. Women at the beginning of the decade had the shortest time to wait. Women at the end of the decade had the longest length of notice. The women in the middle were most severely affected with the steepest rise and the shortest amount of notice. The DWP knows when it sends the letters; it has all that information. It would be quite easy to pick out the level of injustice that women suffered within that decade—it is not enormously complicated—with the direct financial loss being separate because that will take time. We know that a WASPI woman dies every 12 minutes so we do not have time for a long, complicated and drawn-out process of applying for something. There is not time. We appreciate that for direct financial loss it will take longer, but the first part of the compensation process could be simple, quick and sensitive in that way.

The Government have stated that they do not accept the ombudsman’s report and that, even if they did, they do not have enough money to pay compensation anyway. It does feel like killing one bird with two stones. In the light of this difficulty, what solutions or actions can you take from this point?

The Government accepted that there has been maladministration and provided the apology. The only bit that has not happened is the redress for the reasons that have already been discussed. We will do what we have always done at every stage over the 10 years and take legal advice about our options. We will continue to lobby and talk with our MPs and supporters that we have in Parliament. We know that we have an enormous amount of support in Parliament. There was a debate last Wednesday when MPs from all parties spoke passionately about their concern about the constitutional issue—that the decisions of the ombudsman can be ignored, and questioning the point of the ombudsman and how that can be right. Certainly, WASPI women ask how that can be right. We have almost 150,000 women on Facebook and the response was phenomenal. They were completely amazed. One MP said that when he heard, his jaw hit the floor. It was a nasty shock and we are not over it yet.

Of course, the recommendation that has not been accepted is that it is for Parliament to decide, not the Department for Work and Pensions and not the Government without consulting Parliament. We feel that those MPs represent us. There are around 6,000 of us, more in some constituencies, less in others. If our representatives in Parliament are not given their say, it cuts out another aspect of democracy in this particular decision.

Do you feel that whatever might be said about current finances, the Government should have left the door open for action in the future when finances might permit?

Yes, absolutely. Perhaps this year it might have been difficult for them to make that decision, but it should not be made totally.

We have always been pragmatic and open to discussion and conversation. We welcome those discussions and those conversations. One thing that has not been mentioned is that it is been said that 90% of WASPI women knew about the increase to their state pension age. No evidence can back up that sum. That statistic has been quoted by so many people and WASPI women cannot understand that either. We would welcome an opportunity for the Secretary of State to come to talk to you and explain how she reached that figure because it is a mystery to us.

I agree with that and I will talk about it in the next panel, in fact. Thank you.

Thank you both so much for coming to give evidence to the Committee. We very much appreciate your testimony here, so thank you.

Thank you for your time. Examination of witness Witness: Karl Banister.

I was going to give you a formal introduction, but we will start off. It is a pleasure to welcome the last panellist, the deputy ombudsman for the Parliamentary and Health Service Ombudsman, Karl Banister. A warm welcome, Karl. I do not know if you want to say some opening remarks. You have another role apart from being the deputy ombudsman.

Yes, I am deputy ombudsman at the Parliamentary and Health Service Ombudsman. I am also the director of operations, legal and clinical, so I am responsible for the entire casework operation. In fact, I worked on the investigation into women’s state pension age communication from the start. The other thing I want to say is to convey the apologies of Rebecca Hilsenrath, the ombudsman, who could not be here today. I hope I can channel her to some extent. I know she has met you and she welcomes the interest of the Committee in the issue. Thank you.

Thank you. I want to refer first to the statement that was made by the ombudsman following the Government statement. It was a magnanimous statement from the ombudsman. She was pleased that the Government recognised mistakes had been made and that there had been a genuine commitment from the Secretary of State that this would never happen again. I am quoting from the statement: she said, “We look forward to hearing more about the action plan to take this work forward” and about working with the Government on this in the future. Have you heard from the Government and has that offer been taken up by you?

We will take up that offer, definitely. We have started the conversation about a working party, but we are at the stage at the moment of the terms of reference for that. Yes, we welcome the offer. I will say a couple of things. On being magnanimous, thanks for the description there. To unpack, we are pleased that the Government have said there was maladministration. We are pleased that the Government have apologised. Those are the positives. That is the glass half full. On the other side, it is not helpful, in our view, that the Government have then undermined some of that in some of the ways they have responded, such as by saying, “We do not accept that the women did not know,” and picking out some aspects of the surveys but not all the surveys on women’s knowledge and so on. It would have been better if it had been a straight, “We accept maladministration,” but that is where we are. We will definitely work with the Government; that is welcome. We are about two things. One of them is remedy where there has been injustice, individual complaints, or in this case, groups of complaints. The other massive thing for us is improvement for the future. We are optimistic that we will get somewhere with this, so that is pleasing.

Thank you. Can I move on to that last point and think about the six sample cases you took? Six samples were selected, as I understand it—please correct me if I have this wrong—from a caseload of about 600. You had to close it at that stage, but they were selected to represent the case types that you had in that 600. Is that correct?

Yes, that is right. It was an unusual investigation for us and we realised that we would be swamped with complainants. We did not have the resources to handle that, so we conducted an exercise to try to think about the themes we were seeing in the complaints and then, essentially, to select the sample complainants that best reflected those themes and treat those complainants as representative of the whole group. We are bound not to have picked up every possible variation, but we did our best with the 600 to find those themes.

I remember in the previous Committee that we had details of the six sample cases. Have you had any indication from the Government that they are looking to compensate those particular individual cases?

No, we have not. That is unusual. In other investigations we have made systemic recommendations alongside having an individual complainant and, in those cases, the Government have normally compensated the individual complainant. I can only speculate that because we have said the remedy goes to Parliament and because we have said this is a broad-based remedy, the DWP has taken the view that it will not do that. So no, they have not said that.

Can I refer you to another set of cases about the DWP’s handling of migration to employment and support allowance? If redress was not provided to these six individual cases, would that be slightly different from the case around employment and support allowance migration?

In that case, someone was incorrectly not given employment and support allowance and it had a significant impact on the individual concerned. The remedy was around £19,000 for the individual and they were in poverty. In that case, we said that we could see from the circumstances that upwards of 118,000 people would be in the same position. Our recommendation to the DWP was that it should find those people because we had seen a single complaint about that and there was clearly a class of people who were not aware of their rights. That was unsurprising in the circumstances. We recommended that the DWP should find the complainants in those cases. It has not done that. It has had more complaints since then, but not in significant numbers. I suppose the difference is the direct establishable loss there, whereas here we have looked at our severity of injustice scale and said this is a loss of opportunity. This is people never knowing whether they could have done something differently. We deal with that by looking at our severity of injustice scale. It is a different financial remedy but essentially it is the same in the sense that we have set a figure and it is open to the Department to pay that figure.

Thank you. I am going hand over to Frank McNally.

Good morning, Karl. Thanks for joining us today and thanks for the work of the PHSO on this matter over many years. My colleague Gill German asked a similar question to Angela and Debbie in the previous panel, particularly linked to the report. We know the initial report and the subsequent report went without any action from the previous Government, effectively. They were put on a shelf and ignored. The DWP previously did not accept the findings but, as the Chair and you have touched on, it has now accepted that there was maladministration, has apologised and has committed to learning from that. How significant a step is that, based on the journey with this issue over a number of years?

How significant a step is it that the Government are committed to learning, essentially? Is that the question?

And accepted the maladministration and apologised.

It is important. It is extremely problematic to have a parliamentary ombudsman that represents Parliament in scrutinising Government and for the Government to not accept its pure finding on maladministration. That is problematic and it is pleasing that we are not in that position and that that has moved on. It is pleasing that the Government are committed to learning. That is crucial. We are nothing if we do not help the Government to learn from previous mistakes. That is important to us. You could overstate the learning the Government will do because, if I can find it, it is not new that Government has committed to communicating about pensions. If I quote from the first report we did, at paragraph 51—this is going way back to the time of the events—DWP said, “All information provided by DWP should be appropriate, relevant, correct, up to date, clear, concise to the point, helpful and targeted.” It stated, “It is widely accepted that the Department has a duty to give information or advice to inform the public about any new policies and developments that may affect them”. There is more and I could quote more, but I am making the point that it is not new that it is accepted. It has always been accepted that it is a responsibility in this context to communicate. What is good about this commitment is working with us to think about ways to do that better. We welcome that.

That engagement must also take place in a timely manner.

Yes. Timeliness is everything.

In May, the Parliamentary and Health Service Ombudsman stated that the Government doing nothing with the report could constitutionally undermine the organisation. Seeing that we are looking at half a loaf today and probably the most significant part of the loaf is the payment to those affected, have you been made a toothless tiger?

The headline cases make the news, but in 99.9% of our investigations there is full compliance with our recommendations, whether it is an apology, policy change, financial remedy or all of it. This is extremely unusual, but headline cases are headline cases for a reason. They set the tone. We are a toothless tiger only if Parliament steps away from supporting us when there is not compliance. The legislation envisages this relationship where we make reports and Departments are not obliged to implement our recommendations, but they are obliged to be accountable to Parliament as long as Parliament makes sure that happens. If that does happen, there is not a constitutional problem. The reference to a constitutional problem—I think it was me who said that—was because, at that time, it felt unclear what was happening on the back of the report.

Thank you. Would it be helpful if it was legislated that the Government should accept findings of the ombudsman, full stop?

That sounds simple, but we have never asked for that. We have never asked for that because we are not a regulator and it starts to bring with it tinges of regulation. For all organisations where there is enforceability, in effect, of recommendations, litigation becomes a much bigger factor. You see that across the piece. We have never asked for that. We are not the only ones. Whether we ask or not, Parliament has its own view about these things—of course it does. For what it is worth, I have pointed out that in the vast majority of cases there is compliance. Compliance is the highest in organisations that we have the most to do with, such as the health service, where we do 80% of our work. I cannot think of a health service case where we have not had compliance. We have not asked for that and it brings a whole lot of things with it. It is quite a complex question.

The Government have said that you did not properly take into account all the relevant evidence. In particular, it was claimed that 90% of women understood the change in 2006, but that was a survey based on a sample of just 170 women and is contradicted by multiple other figures. For example, the DWP found in 2007 that 50% of women whose pension age had risen to between 60 and 65 still thought it was just 60. In view of this, was it reasonable for the Secretary of State to use the 90% figure again and again as a key justification for not paying compensation?

It is not ideal because it is clear from our report that there are various ways of looking at awareness and the ways that the Department itself deployed at the time had lower figures for awareness than that. In the end, the fundamentals in making a decision here are that the DWP itself at the time knew that the women who it wanted to know did not know, which was contradictory to its statement about how it operates that I read out earlier. It accepts women did not know. In a way, it is a red herring about the numbers. It accepts women did not know. It accepted it at the time. It identified that and thought it should do something about it. The whole investigation is simply about that. DWP knew. That was not what it wanted and it did not act on what it said it should do at the time. That is the maladministration. It is not helpful to introduce a debate about the numbers of people because it has accepted the maladministration. Then, if you accept this maladministration and you accept people were affected by that maladministration, there is a conversation about how you factor cost into the need to do justice. You had conversations earlier about what scheme you might apply. The cost of a scheme does not have to be the £10 billion flat-rate scheme across the piece. The cost of a scheme can be limited by how it is applied, and I can talk a bit more about that if that is useful.

We probably do not have time for that right now. The 90% figure is relevant because it affects the scale of the problem. If one person has been maladministered, it is not an issue. Another key issue in the debate has been the impact of sending letters, whether earlier letters should have been sent, and so on. The Government have said that it would not have made a difference, but writing letters is exactly how the Government continue to communicate many important issues to this day. Was that a reasonable objection, given that it is still standard practice to use letters?

Angela or Debbie said it much better than I could. The Government at the time considered it right to send letters to people to increase awareness. It did not do it. That is the maladministration. It is quite difficult to point back and say that we do not think letters would have worked. The whole point about communicating—we find this with complainants, too, who come to us—is that you have to respect that people receive information in all sorts of different ways and that different demographics have different preferences. Of course, you will be able to find all sorts of people who were aware. We know that. However, we also know that many people engage in different ways and letters are a key part of doing that. Debbie said that most people would read a letter that came in a brown envelope that said official things. That is why the DWP at the time said, “We should write to women.”

Yes, indeed. We talked about how these days you might send a text. Texts have impact because they are personalised. The figures have not distinguished between generic letters and saying, “This is you. This is your particular issue.” Thank you.

That is fair. We do not tell the Government what their policy position should be on telling people things. We hold the Government to their policy position on telling people things. The Government said, “This is our role. We should do this.” Revenue and Customs does not have the same policy position. It does not have a position that it should tell everyone about every tax change in advance. We hold the Government to the standards they set themselves, generally.

They are not in contradiction. Individuals have an individual responsibility to learn about things that affect them. This is reductive. The Government, as we see it, have a responsibility to do what they say they will do and, if they do not like what they say they will do, to change what they say they will do and to think about that and to adjust their policy. Here, the DWP said it would communicate changes that affected people and that that was the right thing to do. Those were publicly available statements. It believed it was not doing it correctly. It talked to itself about that. It informed itself about that. It said it should do some things differently. Then it just did not do them. That was our finding. Our finding did not say that people do not have their own responsibility to inform themselves, but that the Government ought to behave administratively correctly and in accordance with our principles of good administration, which they did not do in this case. They have accepted that.

We did not go there. I am repeating myself a little bit, but it is nuanced here. The point for us was that the Government felt at the time that they needed to send letters and that that was the right way to improve awareness, and then they just did not do it. We have not tried to substitute a view about the right way to communicate with people. That is not for us. That is for the DWP, applying its expertise. However, in this case, it had applied its expertise. It had worked out what it ought to do, which was writing letters, and it just did not do it. We are not offering an opinion on whether that was the best way to do it. We are saying, “You have said it was the best way to do it and you did not do it.”

We looked at the six sample cases, and in those cases we could see, with variation between the complainants, that when they were not aware, they were left with the uncertainty. Had they been aware and had they received a letter that had informed them, they may have done something differently. That is the loss that we talked about; it is a loss of opportunity. You cannot value that, but we do value it and we value it against a scheme we have that sets out how we should value it.

If we were thinking about how to compensate, one way is to simply say, “If you are in this category, here is a flat payment,” but it is also open to ask, “Did you know?” It is open as a condition presently for someone to have to swear that they did not know. That is perfectly reasonable, because what we are saying is that you have not lost out if in fact you did know—and we know that lots of people did.

I will ask a similar question to the one that I asked the previous panel, which is about the compensation scheme that the Government have said would cost £10.5 billion. They say that cannot be justified in the circumstances and that a scheme based on individual circumstances would take many years and thousands of staff to process. Do you accept that dilemma? You mentioned in response to one of the previous questions that you had other ideas about what the Government could do. I wonder if you would share those with us.

Of course there is a dilemma. The DWP is not funded for this, I assume, and that creates a dilemma. Ordinarily, we respect the expertise of organisations to make conclusions about remedies. In effect, we have said that Parliament should ask the DWP to make a proposal about a scheme. It does not have to be exactly what we have said. We tend to believe, as I have said, that the organisation will be more expert than us in working through what that might be. We understand the reservations about a simple flat-rate scheme for the reasons I have set out earlier, but there are ways to be more proportionate. WASPI is not the only stakeholder group in this, but it has offered to talk to the Government about what a scheme would look like. It has made suggestions. I am not supporting or not supporting those, but it is out there. It is clear to me and would be clear to anyone that any scheme would want to avoid burdensome investigations for the reasons that the DWP has said. I would not suggest, if I were asked, that the DWP does what I suggested in relation to the ESA case, where we recommended directly that the DWP should find the complainants. This is not a similar case. There has been lots of publicity. It does not seem proportionate to me to ask the DWP to find people. People should come to the DWP. That will reduce the numbers. We assume that people should contact the DWP. Applicants would have to say that they did not know about the changes, because what is the point of compensating someone for lost opportunity if they knew? They would have to give some statement about why they did not know and the impact on them. The DWP would think about the proportionate, transparent criteria for how it assessed those applications. That might include the possibility of a phone call to discuss the claim. I am not designing a scheme, but I am saying it would be interesting for the DWP, rather than simply saying it is too difficult, to give a bit more detail on why it is too difficult and what it has considered.

Thank you. Amanda, do you want to follow that up?

Yes, to quickly follow up on that, thank you for coming along. I appreciate we are running out of time. Are you aware of any other options for financial redress that were costed and considered by the DWP before it came to its decision? On the other side, did you consider alternatives?

On the first question, no, I am not aware. We did not have a conversation with the DWP before it made the statement or at least not a specific conversation about what it would say. On our positioning, we knew the DWP would not comply with the report so we pushed it towards Parliament because we knew we would end up there. We could not get the conversation we would like to have had. Normally, if we recommend a remedy in a case like this, we have quite a detailed conversation with the organisation to try to get the remedy right. It is not a question of simply investigating and then telling the organisation what it should do. We investigate, we talk to the organisation, we come up with a provisional view, we talk to the organisation about that, we talk to it about the remedy and whether it is achievable, and we adjust based on that feedback. We could not have that conversation in this case and so, no, we did not come up with an alternative to what we said.

You could not have that dialogue. Why could that not take place?

At the time we were concluding the investigation, the DWP’s position was that we should not make findings about this at all. It has moved on from that, which is welcome, but that is where it was at the time.

Remind us of the time, Karl. Did you present it to Parliament at the beginning of last year?

Yes.

The people who need to cost that are in the DWP. We have not attempted to cost that because we have not had that conversation. We are open to a conversation about that.

That is a philosophical question in some ways about what an ombudsman is for. In the end, we are here to stand aside from the Government and take an impartial view about maladministration in particular contexts. We are conscious of the financial context for organisations that we investigate, but we also have to make findings. If we pull away from saying, “Here is potential for a significant finding and a significant remedy and, therefore, we will not investigate this,” it starts to undermine our position. Steve Darling asked before whether we should have enforcement. It is part of the whole push-and-pull environment we work in. If we make a recommendation, it will not automatically be followed. It is for the Government to think about proportionality. That is not to say that we are not conscious of the environment, but we do have to call out maladministration when we see it, without fear or favour.

Thank you. I will move on if that is all right, David.

I feel a little bit like a French aristocrat at the time of the French revolution, afraid of the guillotine.

There is no guillotine. Keep going, Steve.

There is something I do not understand. Can you unpick a bit further why there was not a conversation with the DWP to try to find a deliverable compensation scheme? That would be helpful because I am struggling. Were you surprised that the Secretary of State did not come forward with an alternative scheme in the light of those discussions not happening?

The context was that it was a long investigation and, throughout the investigation, we had understood that the DWP felt that we were getting it wrong. There was a—

A culture?

Yes. As an organisation, if you recall, we were judicially reviewed by WASPI at one point during the process. There was a higher level of focus on getting the investigation right and getting the analysis of that maladministration right with a sense that challenge could come from any quarter. There was not a sense that we were having a strong dialogue about what might happen afterwards. In the context, we may have pursued this more, but given that we were clearly told that the DWP would not accept the report, it did not seem particularly productive to try to have a conversation about something that was not accepted should happen at all.

That was helpful. Are you surprised that the Secretary of State did not come forward with some form of financial resolution in the light of what happens in other places around these?

No. It was a significant development and a significant move forward to accept maladministration, full stop, and to apologise. Those are significant. Was I surprised that there was not also a discussion about a scheme? No, I was not, but I still felt that was a significant change. It changes the debate and it moves the conversation potentially on to that in the future.

I do not want to anticipate the conversations we will have. The Department is always focusing on the users of the service and trying to think about what they need. Doing something now is better than in the future. The lesson from this investigation is: had it done what it thought it should have done, it would not have been that expensive at the time, we would not be in this position now, and these women would not have these regrets that they have now. Working on that and working with the Department to more consistently behave in the right way is something that we can take from this. We are on the record as saying we did an unusual thing in this investigation. We intended it to be a three-stage investigation. We looked at the maladministration issue by itself first and then considered injustice and remedy. We will not do that again. It seemed to us at the time to be right to separate out the issues, but it confused the story. It took longer than it should have done. It meant that each stage was argued about rather than it being argued about as a totality. We will definitely not do that again. We have thought about some aspects of how we organise the team. We are anyway improving our approach to systemic investigations. We did not have a systemic investigations team at the time. We do now. We have certainly taken learning from the approach. We do not want to take six years to do an investigation like this again.

Thank you so much, Karl. It has been a pleasure to have you before the Committee today. That completes this evidence session for the pensioner poverty inquiry.