The Government should look at increasing universal credit for 66-year-olds to prevent financial hardship stemming from the \u201clottery of life\u201d as the state pension age rises to 67, according to a committee of MPs.<\/p>\n
The Work and Pensions Committee said it is backing calls for the Government to increase universal credit for 66-year-olds.<\/p>\n
It said ministers should consult on the change with a view to putting it in place by the end of 2026 as a temporary measure, allowing time to develop longer-term support.<\/p>\n
There is evidence the longer wait for their state pension will \u201charm\u201d 66-year-olds who are unable to keep working until 67, the committee said.<\/p>\n
The state pension age has started a phased rise, gradually increasing in steps from 66 to 67, affecting new pensioners.<\/p>\n
The report said: \u201cFor many, this will be a year of hardship, on inadequate working age benefits, potentially depleting savings they were relying on to support them in retirement.\u201d<\/p>\n
The impacts of the rise to 67 will be very uneven<\/p>\n
Work and Pensions Committee report<\/p>\n
The committee said a growing number of 66-year-olds may have to rely on the standard rate of universal credit of around \u00a3425 a month for longer, despite worsening health.<\/p>\n
Its report added: \u201cOn balance we support increasing the level of universal credit (UC) for all recipients in the year before state pension age because it has a greater impact in reducing poverty and hardship.<\/p>\n
\u201cWe recommend it as a short-term approach, to mitigate the impact of the increase to 67, which has already started.<\/p>\n
\u201cWe propose using UC on the basis that it should enable support to be provided quickly.<\/p>\n
\u201cWe recognise that the impact on work incentives is a consideration. However, the proposal is for a modest increase in support in the year before state pension age.<\/p>\n
\u201cThose out of the labour market at this point in their lives are very unlikely to return to it.\u201d<\/p>\n
People on low incomes can apply for pension credit \u2013 but this support is only available once people have reached state pension age.<\/p>\n
The committee said this leaves many pre-pensioners, particularly those with health issues, caring responsibilities or long histories in labour-intensive jobs, relying on the savings they may have set aside for retirement.<\/p>\n
There is also a geographical consideration, with ill-health and disability concentrated in the most deprived areas, where there are fewer economic opportunities, the committee said.<\/p>\n
The report said: \u201cThe impacts of the rise to 67 will be very uneven.<\/p>\n
\u201cFor many unable to keep working, particularly on low incomes and in the most deprived areas, it will mean hardship as they wait longer for a state pension.<\/p>\n
MPs warned some people may be forced to deplete savings they were relying on to support them in retirement Credit: Alamy\/PA<\/p>\n
\u201cTheir shorter life expectancy means that they can then expect to receive it for a shorter time than those in the least deprived areas.<\/p>\n
\u201cWe know that the last increase \u2013 from 65 to 66 \u2013 resulted in absolute poverty rates among 65-year-olds more than doubling.\u201d<\/p>\n
The report also said: \u201cWe were concerned to hear that, while later working is generally good for health when it is voluntary, this is not the case when it is due to financial necessity, particularly for people having to continue to in physically demanding jobs.\u201d<\/p>\n
It added: \u201cBased on the evidence we have received, there is a clear justification for providing additional social security support for those unable to keep working in the years approaching state pension age.<\/p>\n
\u201cWhile pension age rises have been justified on grounds of fairness between generations \u2013 each generation should expect to spend a similar proportion of adult life contributing to and receiving the state pension \u2013 fairness within generations is also important.\u201d<\/p>\n
Committee chairwoman Debbie Abrahams said: \u201cWe can\u2019t 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.<\/p>\n
\u201cThis is not the later life that anyone wants or to see their loved ones endure after providing for decades.<\/p>\n
\u201cWe should recognise that pre-pensioners have greater needs and greater barriers into employment due to ill-health, age discrimination, lack of opportunity to upskill.<\/p>\n
\u201cMore than half of people are not in paid work in their mid-60s, and they\u2019re not likely to get it if they\u2019ve been effectively written off.<\/p>\n
\u201cAdditional social security payments are essential in reducing the compounding effects of the lottery of life and the state pension age increase.\u201d<\/p>\n
Andrea Barry, deputy director for work at the Centre for Ageing Better, said: \u201cWhat is being proposed by the committee is a short-term measure to alleviate the current issue.<\/p>\n
\u201cIn the longer term, and well before any future state pension rises, we need the Government to take a joined-up approach across pensions, work, benefits, and health, to ensure that the mid-60s is not a period of heightened financial precarity for growing numbers of older people.<\/p>\n
\u201cThis will require ensuring that ongoing reforms to employment and skills support are designed with the needs of older people in mind, alongside enhanced careers guidance and financial planning advice for older workers, and stronger support for those living with health conditions.\u201d<\/p>\n
A Department for Work and Pensions (DWP) spokesperson said: \u201cWe 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.<\/p>\n
\u201cAs of February 2026, just 0.02% of the universal credit caseload was aged 65 or 66.<\/p>\n
\u201cA range of options for extra support are available for those that have not reached state pension age, such as universal credit and other means-tested and disability-related benefits, while the Pensions Commission is examining how we can ensure secure retirements for tomorrow\u2019s pensioners.\u201d<\/p>\n
Caroline Abrahams, charity director at Age UK, said: \u201cWe\u2019re 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.<\/p>\n
\u201cAllowing 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\u2019ve been highlighting for many years, so it\u2019s fantastic that the committee is strongly advising the Government to address it and to do so quickly.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The Government should look at increasing universal credit for 66-year-olds to prevent financial hardship stemming from the \u201clottery…\n","protected":false},"author":2,"featured_media":544470,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,61,60,174,175],"class_list":["post-544469","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-ie","tag-ireland","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/544469","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=544469"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/544469\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/544470"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=544469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=544469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=544469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}