Thousands more older Brits could be pushed onto £425-a-month Universal Credit for longer as the State Pension age rises, prompting MPs to warn that many risk being left in financial hardship.
The Work and Pensions Select Committee has called on the Department for Work and Pensions (DWP) to consider increasing support for people approaching retirement, arguing that existing benefits may no longer provide enough protection as the qualifying age for the State Pension continues to rise. The State Pension age is currently 66 for both men and women but is being increased gradually to 67 over the next two years.
MPs fear the change will leave more people without access to their pension while relying instead on working-age benefits. The committee, chaired by Labour MP Debbie Abrahams, said ministers should examine a range of measures, including increasing Universal Credit payments for 66-year-olds amid concerns that growing numbers could fall below the poverty line before becoming eligible for their State Pension.
Ms 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. 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.”
According to the committee, the higher State Pension age means increasing numbers of 66-year-olds born before 1961 could find themselves claiming the standard £425-a-month Universal Credit allowance for longer instead of qualifying for Pension Credit.
Andrea Barry, of the charity Centre for Ageing Better, said the Government “should have been prepared” for the consequences of increasing the State Pension age. Ms Barry said: “At present, too many people are left to sink or swim by themselves as they approach state pension age.”
Responding to the report, 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.”
The spokesperson added that, as of February, only 0.02pc of Universal Credit claimants were aged 65 or 66.
Caroline Abrahams, Charity Director at Age UK, welcomed the committee’s findings. 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. With the highest poverty rates of any adult age group over 24, people aged 60 to 65 need much more help than is currently offered through the Universal Credit system.
“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 and an issue we’ve been highlighting for many years, so it’s fantastic that the Committee is strongly advising the Government to address it and to do so quickly.
“Providing carers and people with disabilities or long-term health conditions who can’t work and who are within three years of their State Pension age with a little extra money makes a lot of sense and is the right thing to do. With the State Pension age already rising to 67, the Government should immediately put in place provisions to protect these people from hardship.
“We look forward to the Government’s response to the Committee’s report and urge them to act on its recommendations.”