MPs call for universal credit increase as state pension age rises to 67

A cross-party committee has urged the Government to increase support for people waiting longer to receive their state pension

A cross-party committee has urged the Government to increase support for people waiting longer to receive their state pension

A cross-party group of MPs has called on Labour to increase universal credit payments for people aged 66 as the state pension age gradually rises to 67.

They warn many face financial hardship while waiting an extra year to receive their state pension.

The Work and Pensions Committee has recommended enhanced universal credit support for people in their final year before reaching state pension age.

MPs have urged the Government to consult on introducing the change by the end of 2026 as an interim measure while longer-term reforms are considered.

The committee said delaying access to the state pension is likely to "harm" some 66-year-olds who are unable to continue working until they reach 67.

They describe the situation as a "lottery of life" that disproportionately affects more vulnerable people.

The report warned that increasing numbers of 66-year-olds could be forced to rely on the standard rate of universal credit, currently around £425 a month, for longer periods despite experiencing worsening health.

MPs also highlighted that pension credit is not available until someone reaches state pension age, meaning many people approaching retirement are left relying on savings they had intended to use later in life.

The committee said those with long-term health conditions, caring responsibilities or careers involving physically demanding work are among those most affected.

The report stated: "We know that the last increase from 65 to 66 resulted in absolute poverty rates among 65-year-olds more than doubling."

MPs also warned that the impact is greater in more deprived parts of the country, where poor health and disability are more common and employment opportunities are often more limited.

Debbie Abrahams, chairwoman of the Work and Pensions Committee, 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."

Ms Abrahams added: "This is not the later life that anyone wants or to see their loved ones endure after providing for decades."

She said people approaching state pension age often face significant barriers to finding work, including poor health, age discrimination and limited opportunities to retrain.

Ms Abrahams also said that more than half of people in their mid-60s are not in paid employment and many are unlikely to return to work after being "effectively written off."

She described additional social security payments as "essential in reducing the compounding effects of the lottery of life and the state pension age increase."

Andrea Barry, deputy director for work at the Centre for Ageing Better, welcomed the committee's recommendations.

Ms Barry said: "We really welcome the committee's excellent report and hope it causes the Government to step up and take urgent action to tackle an entirely foreseeable increase in poverty caused by another rise in the state pension age."

She described the proposal to increase universal credit as an important short-term measure to help those most affected by the rise in state pension age.

Ms Barry also called for a wider Government strategy covering pensions, employment, benefits and healthcare to reduce financial insecurity among people in their mid-60s.

She said this should include employment and skills reforms designed for older workers, improved careers guidance and financial planning support, alongside better help for people managing long-term health conditions.