Rip off: DWP to take no further action to compensate millions who lost thousands of pounds of extra pensions

Peter Schofield,permanent secretary at the Department for Work and Pensions

Those following the highly complicated story of the estimated 11 million who have lost extra pension payments because they are no longer entitled to a guaranteed minimum pension uprating every year after the new state pension was introduced in 2016 have received a further blow.

Despite further pressure for an explanation from the House of Commons Works and Pensions Committee Peter Schofield, permanent secretary at the DWP, has ruled that no further action to inform people is necessary.

The people affected were a large but distinct group. They were  people who were contracted out of SERPS by their employer but were told they would receive an index linked guaranteed minimum pension. This arrangement was scrapped when the new state pension was introduced in 2016 for anyone in the private sector – but remains for public sector workers.

The money they have lost is anything from a few pounds a week to tens of thousands of pounds over the lifetime of their pension. This decision was never debated in Parliament or included in the Pensions White Paper. Just as with the 50swomen and divorcees, women are the most affected.

Two people complained to the Parliamentary Ombudsman and won £1250 compensation between them for maladministration. Given the numbers involved you would have thought many more would have got compensation. In fact no one else has.

This is not surprising given the DWP ignored the remedy the Ombudsman suggested and put out a factsheet on their site without even an accompanying press release to say it had done it. The factsheet can be found here.

The Commons Work and Pensions Committee took it up with Peter Schofield, the DWP’s permanent secretary, and pressed for an explanation. The MPs have now got it.

The reply from Peter Schofield is here. He explains the factsheet was deliberately tested on people who did not know anything about pensions to prevent bias and 6,922 had viewed it. He claims that 57 per cent of people who saw it said it was ” useful”. Presumably 43 per cent thought it wasn’t.

Just five people put in a claim and none got it

When it comes to inquiries triggered by the website you can count them on one hand. Just five people, none of them eligible.

The DWP explanation why they believe this does not matter is to say the least interesting. He claims that the transitional arrangements for the new pension mean that someone could gain an extra £38.42 a week -presumably referring to the triple lock.

But the triple lock refers to everybody’s pension – it is not just for those who were contracted out. Also it is not a triple lock at the moment – as 12 million pensioners have lost out by not including the higher rise in earnings. And I notice Rishi Sunak, the Chancellor, did NOT reaffirm it was coming back for next year’s pension rise at the recent spring statement. In fact he didn’t mention pensioners at all.

A DWP spokesperson said in response to my story:

“We encourage anyone who is concerned to read the online factsheet and contact us if they think they have been affected.

“The publication of the factsheet is the final step in the Department meeting the Ombudsman’s recommendations on this issue.”

All this to me has wider implications -particularly for the 50swomen still hoping for compensation via the Ombudsman route. The exercise on GMP pensioners resulted in victory for the two complainants who proved there had been maladministration. But not one other person got any money – a complete failure for the Ombudsman.

Bad news for the 50swomen wanting pension compensation

It would be like the six 50swomen complainants over maladministration getting compensation but the DWP devising a way of ensuring the rest of the 3.8 million get nothing.

There has been much talk from some MPs and campaigning groups claiming the women are entitled to £10,000 or payments of up to £20,000. At the moment that is just wishful thinking because it depends on the willingness of the DWP to pay out. The case illustrated by those entitled to compensation for losing their GMP indexation shows the DWP has no intention of doing so if it can get away with it.

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15 thoughts on “Rip off: DWP to take no further action to compensate millions who lost thousands of pounds of extra pensions

    • Liked your comment but the sad truth is by bumping us grumpy OAP’S off through covid the gov saves £1.5bn p/a put NHS costs, social care, LA costs & other DWP payments equating to somewhere near £6.5bn p/a also a one off saving on house construction of perhaps £17bn for the homes not needed cause we have been bumped off. When is boris & crew funding extra social care?

      Like

  1. Thank you David for your reporting on this robbery. While I feel upset by the lack of notice of 60 pension. I am incensed by the rise from 65. Many of my friends are already dead and will never see a penny. It’s simply not true that we’re all living longer. I was opted out for a while in the 90s. No doubt it’ll impact my pension if I ever get to see it.

    Like

  2. Hello, I was wondering if you know who the DWP is accountable to.
    Also do other countries have a social security system which is a law unto themselves or are the open and honest when they have made a mistake.
    Which country has the fairest and most honest system.
    Hope you can answer my questions

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  3. yep that is the mentality of these people, we stole your money and now it’s ours…it’s like they truly believe it is there money now! Paid out in wages and bonuses no doubt…..

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    • sorry, i meant ‘their’…I do actually have an education, pointless as that is…just very tired and under a lot of stress atm is my only excuse 😦 thoroughly ashamed of myself here….

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  4. From your second paragraph “Peter Schofield, permanent secretary at the DWP, has ruled no further action is necessary”.

    Since when does a permanent secretary make the rules? Is it not for the Secretary of State, his political master, to come to parliament to explain this. Mr Timms should be asking questions in the right place

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  5. When will people wake up to the untruths this government tell. We pay for our pensions all our working life but the Government/DWP treat it as though it is something they are giving us which we haven’t contributed too. None of the departments of this government seem to be held accountable for their actions.

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  6. Pingback: Guaranteed Minimum Pensions holders set to lose thousands due to DWP disdain | Vox Political

  7. Dear David Hencke,

    The new flat rate state pension, is reduced if you were ever opted out of SERPs, which is ALL public sector staff (not needing out consent or ever telling us SERPs existed), who were mostly women on low wages, so small works pensions around £4,000 a year.

    I only discovered this by the commissioned writings (to National Pensioners Convention) of the late Tony Lynes (pension expert to Harold Wilson, who brought about SERPs in 1975), about 2014 pension act (he sadly died that year).

    So most women and half of men will never get the full new flat rate state pension, to us who have retired since April 2016 and those retiring for decades into the future, as already lost hundreds if not thousands a year for life from the flat rate state pension.

    This was done to us by the Lib Dems Pension Minister in Tory coalition by 2014 pension act.

    Private or public sector, the finance pages told us that no-one on basic wages (us 80 per cent of people, who are working class by money in life) would get as much works pension when opted out of SERPs, as they would if the contracting out of state second pension had not been done to us by Labour’s Callaghan from 1978.

    So although the majority of COPE (GMP indexation) is with public sector workers (mostly women), we have not gained at all, retired since April 2016.

    over50sparty org uk

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  8. What a surprise! Not only have the government gone to great lengths and secrecy to steal our pensions by several means but they now declare they have no intention to tell us what is going on or compensate those they have openly discriminated against and beached long-standing contracts. More like Russia everyday – in a democracy we would have some recourse to get our money back from these liars. I find it hard to be disgusted – this is now what I have come to expect from our thieving and dishonest government. The only question is just what they will do next to relieve us of our pensions having made us contribute for 48 years when they ‘pretend’ only 38 years are required? I cannot imagine, but I know the level of their low-down deviousness knows no bounds and yet they vote against euthanasia – I suppose they cannot trust themselves not to encourage the old to ‘top’ themselves. How did such a morally-bereft bunch get to run the country?

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  9. A pensions matter some may be interested in (not good news):

    Appeal No. UA-2021-001262-RP

    G.M. -v- SSWP (RP) [2022] UKUT 85 (AAC)

    ‘1. The Appellant’s appeal to the Upper Tribunal is dismissed.

    3. The issue at the heart of this appeal is how the law treats two groups of women in terms of their access to Category B state retirement pensions.

    52. The legacy of Beveridge has led to litigation about women’s pension rights in which discrimination arguments have been run (albeit unsuccessfully most recently in R (on the application of Delve) v Secretary of State for Work and Pensions [2020] EWCA Civ 1199; [2021] ICR 236). Even so, although Mr Mercer did not employ such terminology, the label of institutional sexism may not be out of place in describing the national insurance scheme.

    129. Although we do not know the number of potential claimants in the same position as the Appellant in this case, on the basis of the data from the State Pension LEAP exercise it is reasonable to assume that it is still in the tens of thousands, and potentially more, given the total potential pool of those who might (but not necessarily will) qualify is “in the low hundreds of thousands”. On any basis we are talking about large numbers of women, many of whom will be currently facing financial hardship on a reduced state retirement pension.

    “134. …The need for bright line rules in administering social security schemes has been recognised domestically…”‘

    Click to access UA_2021_001262_RP_CP_317_2021c.pdf

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  10. Pingback: MPs challenge Opperman to rewrite guidance for people who lost thousands of pounds in additional pensions | Westminster Confidential

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