Boost Universal Credit for 66-year-olds suffering hardship as state pension age rises to 67, urge MPs

People aged 66 who are suffering hardship should be given an increase in Universal Credit while they wait longer for their state pension, according to MPs.

The age at which you start receiving the state pension is currently on the increase from 66, and will be 67 for everyone by April 2028.

This will plunge many older people into poverty and the Government should to more to give financial help to the most vulnerable, say MPs on the Work and Pensions Committee.

People aged in their early to mid-60s who cannot work due to health issues, caring duties or inability to carry on in physical jobs are being left to rely on savings they might have set aside for retirement, according to their Transition to State Pension Age report published today.

Others are being forced to choose between poverty and risking their health if they try to keep working until state pension age at 67, it suggests.

Just 42 per cent of 65 year-olds and 29 per cent of 66-year-olds are still working, while almost a quarter of the poorest 60-65 year-olds are working while already in frail health, says the report.

> When can you retire? Read our state pension age guide

When the state pension age last rose to 66 in 2020, poverty more than doubled among people in the year approaching it, rising from 10 per cent to 24 per cent and putting 100,000 below the poverty line, according to the committee report.

It says for people having to wait a further year until they are 67, with many already frail, the impact is likely to be greater this time.

MPs say the Government should consult on increasing UC for 66-year-olds with a view to implementing it by the end of 2026 as a temporary measure, until they come up with a way of providing longer term support.

They say this would cost around £600million compared with the £10.5billion saving from raising the state pension age to 67, and that the need to reduce poverty outweighs any impact on work incentives.

MPs point out a growing number of 66-year-olds might have to rely on the £425-a-month standard rate of Universal Credit for longer, despite worsening health.

Meanwhile, pension credit guarantees just over £1,000 a month but is only available when you reach state pension age. If you are in a couple, there is a different joint pension credit rate worth around £1,500 a month, but you can only apply when the younger partner is old enough to get a state pension.

MPs have called on the government to explore two ways of boosting UC:

– Increasing it for a period of three years, for those unable to work due to ill-health, disability, or caring responsibilities;

– Phasing in increases in the UC standard allowance from age 60 to reach the level of the pension credit guaranteed rate at state pension age.

‘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,’ says committee chair and Labour MP Debbie Abrahams.

‘This is not the later life that anyone wants or to see their loved ones endure after providing for decades.

‘Additional social security payments are essential in reducing the compounding effects of the lottery of life and the state pension age increase.’

Many over-60s have both greater needs and greater barriers into employment due to ill health, age discrimination, and lack of opportunity to learn skills, she pointed out.

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.

‘As of February 2026, just 0.02 per cent of the Universal Credit caseload was aged 65 or 66.

‘A 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’s pensioners.’

Dr Andrea Barry, deputy director for work at the Centre for Ageing Better charity, says: ‘For millions of people, the years before state pension age are full of uncertainty and worry, where poor health, caring responsibilities, barriers to working, and lifelong inequalities, can throw out long-held dreams of a financially secure retirement.

‘Poverty peaks just before state pension age and the previous increase of the state pension age to 66 doubled poverty levels amongst those on the cusp of that age.’

She welcomed the MPs’ report, adding: ‘We suggested a range of potential measures to the committee and wholeheartedly support their call to increase Universal Credit for 66-year-olds to prevent hardship.

‘What is being proposed by the committee is a short-term measure to alleviate the current issue. In 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.’

Caroline Abrahams, charity director at Age UK, says: ‘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.

‘With the state pension age already rising to 67, the Government should immediately put in place provisions to protect these people from hardship.’