Chancellor Rachel Reeves has said most Waspi women knew the state pension age was changing so it was not “the best use of taxpayers’ money to pay an expensive compensation bill”.

The government revealed on Tuesday it would not be compensating millions of women born in the 1950s – called Waspi women – who say they were not given sufficient warning of the state pension age for women being lifted from 60 to 65.

It was due to be phased in over 10 years from 2010, but in 2011 was sped up to be reached by 2018, then rose to the age of 66 in 2020.

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Several leading Labour politicians, including Sir Keir Starmer, Rachel Reeves, Work and Pensions Secretary Liz Kendall and Deputy Prime Minister Angela Rayner, said they would get compensation for Waspi women (Women Against State Pension Inequality) before they were in government.

However, they have all now said compensation, which would have cost up to £10.5bn, will not be provided.

Ms Reeves became the latest, as she said: “I understand that women affected by the changes to the state pension age will be disappointed by the decision but we looked in full at the ombudsman recommendations and they said 90% of women did know these changes were coming.

“As chancellor, I have to account for every penny of taxpayers’ money spent.

“Given the vast majority of people knew these changes were coming, I didn’t judge that it was the best use of taxpayers’ money to pay an expensive compensation bill for something most people knew was happening.”

Earlier this year, an investigation by the Parliamentary and Health Service Ombudsman (PHSO) found thousands of women may have been adversely impacted by failures to adequately inform people of the change.

The watchdog suggested women should receive compensation of between £1,000 and £2,950 – but the findings were not legally binding.

Following the government’s decision to not compensate the women, the ombudsman criticised the government.

Rebecca Hilsenrath, PHSO chief executive, told Times Radio: “It’s great that the government are saying that our intervention will lead to service improvements and it’s fair to say also that people who come to us, overwhelmingly, are motivated by wanting things to improve for other people.

“But what we don’t expect is for an acknowledgement to be made by a public body that it’s got it wrong but then refuse to make it right for those affected.”

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Angela Madden, chairwoman of the Waspi campaign group, said refusing to compensate those impacted was a “bizarre and totally unjustified move”.

She added: “An overwhelming majority of MPs back Waspi’s calls for fair compensation and all options remain on the table.

“Parliament must now seek an alternative mechanism to force this issue onto the order paper so justice can be done.”

Conservative Andrew Griffith, shadow business secretary, told Sky News it was “a big issue of betrayal” by the Labour government.

“I’m not sitting here saying we would necessarily have done something about it. That’s fair,” he said.

“But the point is this government has given everybody the impression that they would, and then they’ve come in, and now they’re saying they wouldn’t. That’s a big issue.

“I can understand people, particularly the Waspi women, feeling enormously let down by that.”

The Labour government is facing backlash after refusing to pay compensation to women who were affected by the rise in state pension age.

The recommendation was put forward by the Parliamentary and Health Service Ombudsman (PHSO) after the campaign group Women Against State Pension Inequality (Waspi) said millions of women suffered financially as they were not given sufficient warning to prepare for the later retirement age.

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Prime Minister Sir Keir Starmer said on Tuesday he understood the concerns of Waspi women, but their demands were not affordable.

Work and Pensions Secretary Liz Kendall issued an apology for a 28-month delay in sending out letters to those born in the 1950s impacted by state pension changes, but said she does not believe paying a flat rate to women at a cost of up to £10.5bn would be a fair or proportionate use of taxpayers’ money.

There were shouts of “shame” when Ms Kendall made the announcement in the Commons, with the government also facing a barrage of criticism from MPs, some of which from within the Labour Party.

Who are the Waspi women?

In the mid-1990s, the government passed a law to raise the retirement age for women over a 10-year period to make it equal to men.

The coalition government under David Cameron and Nick Clegg then sped up the timetable as part of its cost-cutting measures.

In 2011, a new Pensions Act was introduced that not only shortened the timetable to increase the women’s pension age to 65 by two years but also raised the overall pension age to 66 by October 2020 – saving the government around £30bn.

Many women complained they weren’t appropriately notified of the changes by the Department for Work and Pensions (DWP) back in 1995, with some only receiving letters about it 14 years after the legislation passed.

Others claimed to only have received a notification the year before they had been expecting to retire, aged 60, while more said they never received any communication from the department at all.

Come 2015 a group of women impacted by the situation – namely those born in the 1950s – set up the Waspi campaign.

The group took no issue with plans to equalise the pension age, but they claimed millions of women had suffered financially because of the lack of time they had to plan their retirements.

By October 2018, Waspi had secured a full-scale inquiry into the actions of the DWP by the PHSO.

It took five years for them to carry out their work, but when they released their report in March 2024, it was damning.

The PHSO said thousands of women might have been impacted by the DWP’s “failure to adequately inform them” about the change to their state pension age, and they ruled compensation was “owed”.

The report suggested the compensation figure per person – based on the sample cases its authors have seen – should fall between £1,000 and £2,950.

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At the time, the ombudsman’s chief executive, Rebecca Hilsenrath, said she had “significant concerns” the DWP will not act on its findings and its recommendations – which are not legally binding – so PHSO had “proactively asked parliament to intervene and hold the department to account”.

‘A day of shame’

Speaking to Ali Fortescue on Sky News’ Politics Hub, Waspi campaigner, Frances Neil, said that group members have been left “angry” and “devastated” by the government’s decision.

“We are taxpayers,” Ms Neil said. “We’ve earned our pensions.”

She said, in combination with the cut to the winter fuel allowance, it’s been a “tough” few months for older people under Labour.

Ms Neil called on the MPs – of which she says there are 350 – who’ve supported the campaign to “step up and fight for us”.

Angela Madden, chairwoman of Waspi, added: “The government has today made an unprecedented political choice to ignore the clear recommendations of an independent watchdog which ordered ministers urgently to compensate Waspi women nine months ago.

“This is a bizarre and totally unjustified move which will leave everyone asking what the point of an ombudsman is if ministers can simply ignore their decisions.”

The Liberal Democrats also criticised the decision, calling it a “day of great shame”.

Steve Darling, Lib Dem work and pensions spokesman, said: “The new government has turned its back on millions of pension-age women who were wronged through no fault of their own, ignoring the independent Ombudsman’s recommendations, and that is frankly disgraceful.”