The WASPI pension row has highlighted important lessons for policy makers

The Women Against State Pension Inequality (WASPI) campaign has been back in the news following a new report ¹⁰ https://www.ombudsman.org.uk/complaints-womens-state-pension-age  by the Parliamentary Ombudsman. The Ombudsman was not looking at the pros or cons of equalising the state pension age – not the 1995 decision to make the pension age 65 for both women and men by 2020 (it had been 60 for women and 65 for men since 1940) nor the decision in 2011 to align on 66 and accelerate the changes. Some campaigners appeared to be asking for restoration of their “lost” or “stolen” pensions ¹¹ https://www.bbc.co.uk/news/business-68610680  (and they may have had some political support for that), but that was far outside the remit of the Ombudsman (and an earlier attempt at judicial review by a group arguing for that had failed). Instead, the issue at hand was whether DWP had met the necessary standard in how it went about informing women of the changes that potentially required a radical rethink of their retirement plans.  

DWP’s own research showed how little attention people pay to profound policy changes

One of the pitfalls for policy makers is what the Behavioural Insights team and the IfG have called “the illusion of similarity” ¹² https://www.instituteforgovernment.org.uk/publication/report/behavioural-government  – that policy makers assume that the general public will share their take on an issue, whether it is awareness of the issue or an appreciation of why a decision was taken. But most people do not spend their busy lives focusing on the latest policy announcement (and governments often do not want to trumpet bad news), and it is in this fog of uninterest that people can be left unaware of big changes.

So while the Ombudsman thought the government’s general communications efforts in the mid-1990s, when the initial legislation passed, were perfectly fine, DWP’s own research showed a widespread lack of awareness of the age change among those who would be most immediately affected in the early 2000s. A renewed campaign, with direct mail, was recommended to address that ignorance – but the Ombudsman judged that departmental prevarication and delay cost women a couple of years to prepare. In effect, rather than have 15-25 years to prepare, this delayed communication meant those who had failed to notice the changes in the mid-1990s had only 3-13 years to prepare – and that was exacerbated when in 2011 the government accelerated the timetable (and raised the age to 66) as part of austerity.  

The case raises questions about how much awareness it is reasonable for government to expect on behalf of citizens. The government has a duty to communicate – and the big lesson is that it should have followed through after its research showed the extent to which people were oblivious to the change – but the Ombudsman is silent on whether that is tempered by any expectation on citizens to pay attention to decisions government is making.  

Government also needs to look at the way it responds to complaints

The Ombudsman was also critical of the way in which DWP handled specific complaints. Many of the letters the department received were “template” letters, and the temptation in government is to reply to these sort of campaigns in kind – with generic brush-off letters asserting the justification for the policy. But some these letters were tailored, asking individual questions about, for example, changes to rules around national insurance contributions – but the department did not always address these. Dealing with correspondence is regarded as a chore, often farmed out to dedicated teams well away from the policy coalface. But this is a timely reminder of how much this activity (which ministers always prize much more highly than their officials) matters – and that there are real consequences from treating it too casually. (Taking complaints seriously, spotting patterns and considering the consequences could have nipped the Horizon scandal at source as well.)

Moreover, misleading information that the pension age for women was 60 hung around on a government website until 2016. It was changed quickly when the problem was spotted – but some people may have seen that and felt reassured.  

The Ombudsman outcome risks satisfying no one – at considerable cost

The government is now in the worst of all worlds. The Ombudsman found some injustice – in terms of stress and loss of autonomy caused – but did not think there were financial losses, so its recommendation for compensation of £1,000–£2,950 comes nowhere close to what those who think they were cheated out of pensions wanted and is well down the scale even for maladministration. But that amount still comes with a price tag in the billions – because the recommendation seems to be to compensate the entire affected cohort, even those who were perfectly well aware of the changes. If injustices are to be ranked, this comes far below the malicious wrecking of lives in the Post Office scandal or the death and destruction wrought on families by the NHS’s use of infected blood.  

Perhaps the best outcome would be for the government to learn the lessons and move on without paying compensation, but invest a fraction of the sum in increasing women’s financial literacy and ability to plan for their retirement – because although state pension ages are now equal, there is still a big gap on overall income in retirement.