Members of Parliament are urging the government to increase Universal Credit payments for 66-year-olds experiencing hardship as the state pension age continues to rise. The call comes from the Work and Pensions Committee in a report highlighting concerns that the transition to a pension age of 67 could push vulnerable older individuals into poverty.
The state pension age is gradually increasing and is set to reach 67 for everyone by April 2028. According to the committee's report, titled "Transition to State Pension Age," this shift is expected to exacerbate financial difficulties for many individuals in their early to mid-60s who are unable to work due to health issues, caregiving responsibilities, or the physical demands of their jobs. These individuals may be forced to deplete retirement savings or risk their health by continuing to work.
The report notes that only 42% of 65-year-olds and 29% of 66-year-olds are still employed. Furthermore, nearly a quarter of the poorest individuals in the 60-65 age bracket are reportedly working while in frail health. The committee points to the previous increase in the state pension age to 66 in 2020, which saw poverty levels among those approaching that age more than double, from 10% to 24%, pushing 100,000 people below the poverty line.
MPs are proposing that the government consult on increasing Universal Credit for 66-year-olds, with the aim of implementing it by the end of 2026 as a temporary measure. This proposed increase is estimated to cost around £600 million, a fraction of the £10.5 billion saved by raising the state pension age to 67. The committee argues that the need to reduce poverty outweighs any potential impact on work incentives.
The report suggests exploring two main avenues for boosting Universal Credit: increasing it for a three-year period for those unable to work due to ill-health, disability, or caring duties; or phasing in increases to the standard Universal Credit allowance from age 60, eventually reaching the level of the Pension Credit guaranteed rate by state pension age.
Committee chair Debbie Abrahams MP stated that allowing people nearing pension age who are already struggling to choose between working in poor health or prolonging poverty is unacceptable. She emphasized that additional social security payments are crucial to mitigate the compounding effects of life circumstances and the rise in state pension age.
A spokesperson for the Department for Work and Pensions acknowledged the report and stated that recommendations will be considered. The spokesperson also noted that as of February 2026, only 0.02% of the Universal Credit caseload comprised individuals aged 65 or 66. They added that various support options are available for those not yet of state pension age, including Universal Credit and other benefits, and that a commission is examining ways to ensure secure retirements.
Experts also voiced concerns. Dr. Andrea Barry from the Centre for Ageing Better highlighted that the years before reaching state pension age are fraught with uncertainty for millions, where health issues, caregiving, and employment barriers can derail retirement plans. She welcomed the MPs' call to increase Universal Credit for 66-year-olds to prevent hardship, suggesting it as a short-term solution while advocating for a long-term, integrated approach across pensions, work, benefits, and health.
Caroline Abrahams, charity director at Age UK, echoed these sentiments, stating that people aged 60 to 65 require more support than Universal Credit currently provides, noting that poverty rates are highest in this age group. She described the situation of forcing individuals who can no longer work to struggle financially until they reach state pension age as a "senseless waste."