MPs push for Universal Credit boost for those aged 66 ahead of state pension age rise

However, the Government has stopped short of committing to an increase and will consider additional support as part of a wider review due to conclude by March 2029.

The Work and Pensions Committee has warned that this will be too late for those affected by the State Pension age rising from 66 to 67.

Committee chair Debbie Abrahams has written to Pensions Minister Torsten Bell asking why ministers have rejected faster action. She has also requested a full assessment of how the increase will affect older people.

The State Pension age is rising gradually and will reach 67 by April 2028. This means a growing number of people must wait beyond their 66th birthday before becoming eligible for the State Pension and Pension Credit.

The committee highlighted the large difference between payments available before and after someone reaches State Pension age.

A person relying on Universal Credit receives a standard allowance of £425 a month. Pension Credit, which becomes available only after reaching the qualifying age, guarantees an income of £1,031 a month.

MPs recommended consulting on a temporary Universal Credit increase for people approaching State Pension age by the end of 2026.

The proposed support would cost an estimated £600million. This compares with the £10.5billion the Government is expected to save by raising the State Pension age.

Ms Abrahams warned that waiting until the Government’s review ends in 2029 “will simply come too late” for those already facing financial hardship.

The committee pointed to what happened when the State Pension age was last increased in 2020.

Poverty among people in the year immediately before reaching State Pension age more than doubled, rising from 10 per cent to 24 per cent. The change pushed around 100,000 people below the poverty line.

With the qualifying age now moving up by another year, MPs warned that the consequences could be more severe, particularly for people who are unable to continue working because of poor health.

The employment picture for this age group is bleak. Just 42 per cent of 66-year-olds are in paid work.

Among the poorest pre-pensioners aged 60 to 65, nearly a quarter are working despite being frail, which research has shown worsens their health conditions.

Ms Abrahams said people approaching pension age should not be “forced to choose between continuing work in poor health or prolonging their poverty as they wait for their State Pension to kick in”.

“This is not the later life that anyone wants or to see their loved ones endure after providing for decades,” she added.

The committee chair argued that pre-pensioners face greater barriers to employment, including ill health, age discrimination and a lack of opportunities to retrain.

“More than half of people are not in paid work in their mid-60s, and they’re not likely to get it if they’ve been effectively written off,” she said.

In response to the committee’s demands, the Government pointed to existing tailored employment support for older workers.

Ms Abrahams dismissed this in her letter to Mr Bell, describing the prospect of offering jobs to people whose health problems have been worsened by delayed operations as “impractical and cruel”.

The committee also raised serious concerns about what it called “poor policymaking” around the pension age increase.

MPs noted that the most recent impact assessments underpinning the change date back to 2011 and 2013, making them more than a decade old, and no new assessments are planned until after the rise is complete.

This has created what the committee described as a “significant gap in the Government’s understanding” of how the change is affecting people.

MPs said “an opportunity to inform mitigations has been missed” after ministers failed to act on a recommendation in the committee’s earlier Pensioner Poverty report to carry out an assessment before the rise took effect.

In her letter to Mr Bell, Ms Abrahams called for a full impact assessment that takes into account the rising frailty among pre-pensioners and the associated costs to the NHS and social care.