The Work and Pensions Committee has backed calls for the Government to increase Universal Credit for 66-year-olds as the State Pension age rises to 67, warning of financial hardship from the “lottery of life”. The committee recommends ministers consult on the change and implement it as a temporary measure by the end of 2026, while longer-term support is developed.
Impact of State Pension Age Rise
The State Pension age has begun a phased increase from 66 to 67, affecting new pensioners. Evidence suggests the longer wait will “harm” 66-year-olds unable to work until 67. The committee’s report states: “For many, this will be a year of hardship, on inadequate working age benefits, potentially depleting savings they were relying on to support them in retirement.” A growing number of 66-year-olds may rely on the standard Universal Credit rate of around £425 a month, despite worsening health.
Committee Recommendations
The report supports “increasing the level of universal credit (UC) for all recipients in the year before State Pension age because it has a greater impact in reducing poverty and hardship.” It recommends this as a short-term approach to mitigate the rise to 67, using UC to provide support quickly. The committee acknowledges work incentive concerns but notes that “those out of the labour market at this point in their lives are very unlikely to return to it.”
People on low incomes can apply for pension credit only after reaching State Pension age. This leaves pre-pensioners, especially those with health issues, caring responsibilities, or long histories in labour-intensive jobs, relying on retirement savings. The report highlights geographical disparities: ill-health and disability are concentrated in deprived areas with fewer economic opportunities.
Uneven Impacts and Poverty Risks
The report states: “The impacts of the rise to 67 will be very uneven. For many unable to keep working, particularly on low incomes and in the most deprived areas, it will mean hardship as they wait longer for a State Pension. Their shorter life expectancy means that they can then expect to receive it for a shorter time than those in the least deprived areas.” The previous increase from 65 to 66 resulted in absolute poverty rates among 65-year-olds more than doubling.
Later working is generally good for health when voluntary, but not when due to financial necessity, especially in physically demanding jobs. The committee found “a clear justification for providing additional social security support for those unable to keep working in the years approaching State Pension age.” While pension age rises are justified on intergenerational fairness, “fairness within generations is also important.”
Expert Reactions
Committee chairwoman Debbie Abrahams said: “We can’t just allow people who are already struggling as they approach pension age to 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. We should recognise that pre-pensioners have greater needs and greater barriers into employment due to ill-health, age discrimination, lack of opportunity to upskill. 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.”
Andrea Barry, deputy director for work at the Centre for Ageing Better, said: “What is being proposed by the committee is a short-term measure to alleviate the current issue. In the longer term, and well before any future State Pension rises, we need the Government to take a joined-up approach across pensions, work, benefits, and health, to ensure that the mid-60s is not a period of heightened financial precarity for growing numbers of older people.”
A Department for Work and Pensions (DWP) spokesperson said: “We welcome the Work and Pensions Select Committee inquiry on the transition to State Pension age and will consider their report and recommendations in due course. As of February 2026, just 0.02% of the universal credit caseload was aged 65 or 66. A range of options for extra support are available for those that have not reached State Pension age, such as universal credit and other means-tested and disability-related benefits, while the Pensions Commission is examining how we can ensure secure retirements for tomorrow’s pensioners.”
Caroline Abrahams, charity director at Age UK, said: “We’re delighted that the select committee has recognised that far too many people approaching their State Pension age find themselves in a very difficult financial position. Allowing people who are realistically never going to work again to struggle to make ends meet until they hit State Pension age is a senseless waste and an issue we’ve been highlighting for many years, so it’s fantastic that the committee is strongly advising the Government to address it and to do so quickly.”
