The Work and Pensions Committee has backed calls for the Government to increase Universal Credit for 66-year-olds to mitigate financial hardship caused by the rising state pension age. The committee recommends that ministers consult on the change and implement it as a temporary measure by the end of 2026, allowing time to develop longer-term support.
Impact of State Pension Age Rise
The state pension age has begun a phased increase from 66 to 67, affecting new pensioners. The committee warns that many 66-year-olds who cannot keep working until 67 will face a "year of hardship" on inadequate working age benefits, potentially depleting savings meant for retirement. A growing number may have to rely on the standard Universal Credit rate of around £425 per month, despite worsening health.
The 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." The committee supports increasing Universal Credit for all recipients in the year before state pension age, as it has a greater impact on reducing poverty and hardship.
Proposed Temporary Measure
The committee proposes using Universal Credit to quickly provide support, acknowledging the impact on work incentives but noting that those out of the labour market at this stage are unlikely to return. It recommends this as a short-term approach to mitigate the increase to 67, which has already started.
People on low incomes can apply for pension credit only after reaching state pension age, leaving many pre-pensioners—especially those with health issues, caring responsibilities, or histories in labour-intensive jobs—relying on savings. The committee highlights geographical disparities, with ill-health and disability concentrated in deprived areas with fewer economic opportunities.
Uneven Impacts and Poverty Concerns
The report warns: "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." It notes that shorter life expectancy in deprived areas means these individuals receive the pension for less time. The previous increase from 65 to 66 doubled absolute poverty rates among 65-year-olds.
The committee also heard that later working is beneficial only when voluntary; financial necessity, especially in physically demanding jobs, harms health. 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."
Call for Long-Term Solutions
Andrea Barry, deputy director for work at the Centre for Ageing Better, said the proposed measure is a short-term fix, and the Government needs a joined-up approach across pensions, work, benefits, and health to prevent financial precarity in the mid-60s. A Department for Work and Pensions spokesperson said: "We welcome the Work and Pensions Select Committee inquiry... and will consider their report and recommendations in due course." They noted that as of February 2026, only 0.02% of Universal Credit caseload was aged 65 or 66, and other support options exist.
Caroline Abrahams, charity director at Age UK, praised the committee's recognition of the issue, saying: "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... it’s fantastic that the committee is strongly advising the Government to address it and to do so quickly."
