Angela Madden, Chair of Women Against State Pension Inequality (WASPI), said: “Ministers have demonstrated their utter contempt for 1950s-born women, for Parliament and for the Parliamentary Ombudsman. The Government has kicked the can down the road for months, only to arrive at exactly the same conclusion it has always wanted to.

“This is a disgraceful political choice by a small group of very powerful people who have decided the harm and injustice suffered by millions of ordinary women simply does not matter.”

A report by the Parliamentary and Health Service Ombudsman has previously suggested compensation ranging between £1,000 and £2,950 could be appropriate for each of those affected by how state pension changes had been communicated.

But in December 2024, the Government said while it accepted the Ombudsman’s finding of maladministration and apologised for a delay in writing to 1950s-born women, a blanket compensation scheme, which could cost taxpayers up to £10.5 billion, could not be justified.

Women Against State Pension Inequality (Waspi) have long-campaigned for redress for the way state pension changes were communicated.

In November, Mr McFadden said his department would review a previously-announced policy not to compensate the women born in the 1950s.

It came as court proceedings led to the rediscovery of a 2007 Department for Work and Pensions evaluation which had led to officials stopping sending automatic pension forecast letters out.

However, Mr McFadden offered campaigners no guarantees the review would lead to compensation being awarded.

Speaking to the Commons on Thursday, Mr McFadden said: “I’ve heard calls for compensation aimed at lower income pensioners – and we have focussed in the last 12 months on raising Pension Credit uptake – but in the context of this decision – a scheme focused on any single income group still doesn’t specify who may or may not have suffered injustice.

“That’s why, in taking this new decision the Government has come to the same conclusion on compensation as my Right Honourable Friend, the previous Secretary of State, announced in December 2024.”

Ms Madden said her campaign was “taking legal advice” and added that “all options remain on the table”.

She said: “The Parliamentary Ombudsman says economic circumstances should not be used as an excuse to deny compensation. The Government has magically found billions to fund policies not made in their election manifesto, proving money can quickly become available when ministers consider something a priority.

“WASPI is taking legal advice, and all options remain on the table. We stand ready to pursue every avenue in Parliament and in the courts to secure the justice that has been so shamefully denied.”

Dennis Reed, the director of Silver Voices, blasted: “This cruel decision amounts to a declaration of war on senior citizens and shows that Labour has given up all hope of regaining the trust and votes of pensioners.

“To deliberately raise the hopes of millions of older women while buying time to get their legal ducks in a row is beyond contempt. This is the latest in a line of betrayals of older people and Waspi women are encouraged to join Silver Voices to mount a general political fight back”.