A recent report from the Work and Pensions Committee is advising the Labour Party to implement a measure that would increase Universal Credit payments for 66-year-olds, costing around £600 million, by the end of 2026.
State pension age rise prompts concern
The state pension age is rising from 66 to 67 between May 2026 and April 2028, and is legislated to increase further to 68 between 2044 and 2046. As a result, an increasing number of 66-year-olds are expected to become dependent on working-age benefits for a longer period.
Universal Credit, claimed by over eight million people in the UK, provides a standard allowance of £425 a month, while Pension Credit, accessible only after reaching state pension age, gives over twice as much at £1,031 per month.
Impact on savings and vulnerable groups
The committee warns that some may withdraw savings intended for retirement to cover basic living costs. Those affected include carers and those with long-term disabilities. Data shows that nearly a quarter of people aged between 60 and 65 are being forced to work despite being frail.
MPs have criticised "poor policymaking," with Caroline Abrahams, charity director at Age UK, describing it as a "senseless waste." She 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."
