Poverty among people the year before retirement doubled when the state pension age rose to 66 (Image: Getty)
Struggling Brits hit by a rise in the state pension age are being left in “perilous” positions, charity bosses say. The age from which people can claim the payment began to increase from 66 to 67 in April. But there are warnings pre-retirees are being forced to work longer despite financial, health and employment difficulties.
Caroline Abrahams, Charity Director at Age UK, told the Daily Express many face significant problems. She said: “Many older workers are either struggling to work or completely unable to do so due to ill health, caring responsibilities or ageism in the labour market, leaving them in a perilous position.”
Ms Abrahams said many are reliant on benefits such as Universal Credit or forced to use up savings they put by for their retirement.
One in five people aged 60 to 64 live in poverty, according to Age UK. Ms Abrahams explained this is the highest rate of any adult age group aged over 24.
Age UK’s charity chief said: “This clearly shows just how difficult many are finding it to make ends meet.”
The rise in the state pension age was announced in 2011 in response to projections of increasing life expectancy and a drive to make spending cuts.
Office for Budget Responsibility estimates suggest the move to 67 will save the public purse about £10billion by the end of the decade, compared with leaving the age at 66.
According to the Institute for Fiscal Studies, previous increases led to some staying in work for longer.
The employment rate for 65 year olds rose about 10 percentage points when the state pension age rose to 66, the think tank has said.
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Joanna Elson CBE, Chief Executive of Independent Age, told the Express previous increases also led to more poverty among people approaching state pension age, especially those in poor health or insecure jobs.
She said: “The current group aged just below state pension age already experience high levels of poverty compared to other age groups.
“This problem is likely to be worse for future cohorts of people aged 60-66 years old for the next couple of decades due to demographic changes in private pension receipt, housing tenure and trends in healthy life expectancy.”
It is too soon to tell how the ongoing age rise is affecting the population as a whole. Figures published by the Work and Pensions Committee show that when the age went up from 65 to 66 it left 100,000 more 65 year olds unable to meet their basic needs.
Debbie Abrahams MP, who chairs the Committee, said: “Over the course of our inquiry it’s been made clear that the pre-pensioners will be hit as the state pension age goes up, the question is by how much?
“The fact is, the last time the state pension age rose – to 66 – instances of poverty among people the year before retirement doubled.
“This time round, people will be a year older than last time. With an extra year’s worth of accumulated health problems and a year’s extra spending without work for those forced out due to ill-health, older people’s organisations have told us we can expect the impact will be worse.”
Ms Elson said she hoped the Government would act on recommendations from an inquiry carried out by the Work and Pensions Committee. Its report is due within weeks. She urged ministers to introduce measures to lessen the impact of the age increase.
This includes reversing a rule which prevents older couples on low incomes from accessing pension credit because their partner falls below state pension age.
Age UK urged the Government to help those who can work longer to do so and provide extra support through the benefits system for those locked out of work and waiting in poverty before they reach pension age.
Asked if there are plans in the pipeline, a spokesperson from the Department for Work and Pensions (DWP) said: “Supporting pensioners is a priority and our commitment to the triple lock for the rest of this Parliament means millions of pensioners will see their yearly state pension rise by up to £2,100.”
They added: “We are determined to turn the tide on poverty after years of rising hardship. Our recent statistics show that effort is beginning to make a difference – household incomes have risen 5 % in real terms, food bank usage has fallen, and food insecurity is down.”
The spokesperson pointed to support already available to those of working age, including employment support such as Universal Credit. A £1billion fund also gives councils the “certainty” to help prevent households falling into crisis, according to the DWP.