Thousands older people could be pushed into extreme poverty under upcoming pension changes, experts have warned.
Analysts say shifts to the state pension age will leave thousands struggling to make ends meet in later life.
A cross-party group of MPs has launched an inquiry into the income gap facing people approaching retirement, ahead of the planned rise in the state pension age to 67.
Those aged 60 to 64 are now among the poorest of all working-age adults, with many leaving work early due to poor health or caring responsibilities but unable to claim their state pension.
In 2023/24, around 22 per cent of people in this age group – roughly 876,000 – were living in poverty.
From April, the Government will phase in a state pension age increase from 66 to 67 to be complete within two years.
The last time the pension age went up from 65 to 66 it led to 100,000 more 65-year-olds in absolute income poverty compared to before. Experts warn it could be even worse when the next hike takes place.
Thousands of over 60s warned huge change could leave you ‘falling between the cracks’
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GETTYMany people in their early 60s are stuck in a difficult position. They’ve left work but aren’t yet old enough to claim the state pension, leaving them with little or no income during these years.
Research conducted by Schroders Personal Wealth has also uncovered that more than half of British adults remain completely uninformed about significant state pension reforms taking effect from next year. The revealed that 51 per cent had no awareness whatsoever of the upcoming changes.
Among the most significant reforms is the scheduled increase in state pension eligibility age from 66 to 67, which will be phased in between 2026 and 2028.
The Institute for Fiscal Studies has cautioned that these adjustments will force more elderly people into financial hardship
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The inquiry comes after the Government responded to the Committee’s report on pensioner poverty but failed to produce the full strategy it had been urged to deliver for tackling the challenges of an ageing population.
When asked whether a new review of the upcoming state pension age rise would be carried out, officials pointed to an assessment from 2013 as the most recent analysis.
That twelve-year-old assessment was carried out long before the economic impact of the coronavirus pandemic and its lasting effects on public health.
Past evidence raises concerns, as the last increase in the pension age -from 65 to 66 – led to around 100,000 more 65-year-olds living in absolute income poverty compared with before the change. Committee Chair Debbie Abrahams said, “In our Pensioner Poverty report we called on the Government to create a coherent cross-governmental strategy that would get ahead of the consequences of an ageing society.
“Its response pointed to a lot of – not unwelcome – standalone policies, but nothing that amounted to a guiding star for all departments for the health of the country as it edges towards retirement. It potentially leaves people exposed to falling between the cracks.
“Pre-pensioners are particularly exposed. You could’ve worked a grueling 45 years as a skilled tradesperson paying taxes only to find yourself short of cash as you limp from day-to-day for more years until the pension payoff. It’s only natural that this situation would make you feel a sense of injustice facing hardship having been independent and contributing for decades.
“We do not yet know the impact of the State Pension age increase on these people. The Government’s last impact assessment on pushing the retirement age to 67 was in 2013, before the damage caused by Covid to the economy and to people’s health.
“We will be investigating the scale of the need to smooth over this transition period and how it can be done.”
In July, the Government launched a state pension age review to look at how future increases should be managed. However, the review will not cover the upcoming rise to 67, which is already planned.
Those wishing to submit evidence to the Committee’s inquiry can respond to any or all of the questions listed on the inquiry webpage by 4pm on December 19, 2025.