The Work and Pensions Committee has called on the Government to increase universal credit for 66-year-olds as a temporary measure to prevent financial hardship caused by the phased rise in the state pension age from 66 to 67. The committee warned that some individuals face a 'year of hardship' on inadequate working age benefits and may be forced to deplete retirement savings.
Committee Backs Universal Credit Increase
In a report published on 11 July 2026, the committee said ministers should consult on the change with a view to implementing it by the end of 2026. The proposal is intended as a short-term fix while longer-term support is developed. The state pension age increase, which began in 2026, affects new pensioners born after April 1960.
The report stated: '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.' It highlighted that a growing number of 66-year-olds may have to rely on the standard rate of universal credit, around £425 a month, for longer, despite worsening health.
Impact on Health and Savings
The committee argued that those unable to keep working until 67, particularly those with health issues, caring responsibilities, or physically demanding jobs, are at risk. 'The impacts of the rise to 67 will be very uneven,' the report said. '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 report noted that the previous increase from 65 to 66 resulted in absolute poverty rates among 65-year-olds more than doubling. It also warned that later working due to financial necessity, rather than choice, can harm health, especially in physically demanding jobs.
Geographical Disparities
The committee highlighted geographical inequalities, with ill-health and disability concentrated in the most deprived areas where economic opportunities are fewer. People on low incomes can apply for pension credit, but this support is only available once they reach state pension age, leaving pre-pensioners reliant on savings.
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.'
Short-Term and Long-Term Solutions
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.'
Caroline Abrahams, charity director at Age UK, added: '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.'
Government Response
A Department for Work and Pensions 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.'
