High Court orders Lloyds to pay £150m to female pensioners

The landmark court ruling on sex discrimination could lead to £20 billion in payouts for millions of women who work in the private sector.

The decision comes after three women brought a case against the group, which includes Bank of Scotland, complaining that their pension incomes were increasing at a lower rate than those of male counterparts.

Almost 3,000 members of BTU, the trade union representing Lloyds staff, later joined the case, in a class action lawsuit.

The class action had led to estimates that Lloyds might have had to find as much as £500 million to make up the shortfall suffered by female pensioners.

But Mr Justice Morgan narrowed down the methodology to be used to calculate the payments, which will now be between £100 million and £150 million.

The case revolved around guaranteed minimum pensions (GMPs) for employees who contracted out of state pensions, allowing them and their employers to pay lower national insurance. Employers benefiting from the tax break would then promise staff a pension equivalent to what they would have got from the state, before opting out. Existing rules allow GMPs to be lower for women, owing to their earlier retirement age.

The BTU estimates that 35,000 scheme members will see their annual retirement income rise by more than £500, with a further 8,000 enjoying an increase of £3,000 or more.

It believes the ruling will also lead to higher payments for 5 million members, most of them female, of more than 6,000 other retirement schemes, with the total cost estimated by the government at £10 billion to £20 billion.

The union said: “Let’s be clear: had we succumbed to the bank’s bullying and jettisoned our principles for a seat at the ‘negotiating’ table we would not have been able to pursue this case on behalf of all pension scheme members.

“The bank’s two staff unions – Accord and Unite – talk the talk but when it comes to walking the walk to protect the interests of staff they are simply not capable of doing what’s necessary. Naively, they believe that cosying up to the bank will benefit their members – it won’t.”

A spokesperson for Lloyds, said: “The hearing focused on what is a complex and longstanding industry-wide issue. The group welcomes the decision made by the court and the clarity it provides. The group and the pension scheme trustee will be working through the details in order to implement the court’s decision.”