The Work and Pensions Select Committee has issued a strong warning to the Department for Work and Pensions (DWP) regarding the financial challenges facing older workers as the state pension age increases. With the state pension age rising from 66 to 67 in the coming years, MPs caution that many retirees may face severe financial hardship if additional support is not provided.
Currently, the state pension age is 66 for both men and women, but it is scheduled to increase to 67 within the next two years. The committee, chaired by Labour MP Debbie Abrahams, urged the government to take immediate action to ease this transition, including increasing the Universal Credit rate for 66-year-olds. They express concern that without these measures, many individuals will fall below the poverty line during this extended waiting period for their pension.
Debbie Abrahams emphasized the human impact: “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.”
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One key point raised is the £425 monthly cap on Universal Credit for claimants born before 1961. Due to the pension age hike, a growing number of 66-year-olds find themselves dependent on this limited amount for longer, instead of qualifying for pension credit, which offers better financial support.
Andrea Barry, from the charity Centre for Ageing Better, criticized the government’s preparation for this shift: “At present, too many people are left to sink or swim by themselves as they approach state pension age.”
In response, a DWP spokesperson acknowledged the committee’s report saying, “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.” They also noted that as of February, only 0.02% of Universal Credit claimants were aged 65 or 66.