The Work and Pensions Committee has published a report urging the Government to implement a £600 million temporary increase in Universal Credit for 66-year-olds who are facing hardship as the State Pension age rises to 67. The cross-party committee says the change should be consulted on and implemented by the end of 2026 as a temporary measure, allowing time to develop longer-term support.
State Pension age rise leaves 66-year-olds in poverty
The State Pension age is gradually increasing and will reach 67 by April 2028. As a result, more 66-year-olds must rely on Universal Credit's standard rate of £425 a month for longer, despite often having worsening health. Pension Credit, which can provide up to £1,031 a month, is only available to those who have reached State Pension age. The committee warns that many pre-pensioners, especially those with health issues, caring responsibilities, or long histories in physically demanding jobs, are forced to deplete their savings before they can access pension-age support.
When the last State Pension age rise took effect in 2020, poverty among people in the year approaching it more than doubled, from 10% to 24%, pushing 100,000 people below the poverty line. The MPs said that with people now waiting a further year, and many already frail, the impact is likely to be greater this time.
Low employment rates among 66-year-olds
The committee noted that only 42% of 66-year-olds are in paid work, while 24% of the poorest 60-65 year-old pre-pensioners are working despite being frail, which research shows deepens health problems. The report estimates that providing additional support through Universal Credit to 66-year-olds would cost £600 million, out of the £10.5 billion savings the State Pension age rise is expected to bring for the Treasury.
The MPs acknowledged that the impact on work incentives is a consideration, but said it is outweighed by the imperative to reduce poverty. They raised concerns about poor policymaking, noting that the most recent impact assessments for the State Pension age increase are from 2011 and 2013, and no further assessment is planned until after the rise is complete. This has resulted in a significant gap in the Government’s understanding of the rise's impact.
Committee chair calls for urgent action
Labour MP and Committee Chair 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.”
She added: “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. Additional social security payments are essential in reducing the compounding effects of the lottery of life and the state pension age increase.”
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, while the Pensions Commission is examining how we can ensure secure retirements for tomorrow’s pensioners.”
