A cross-party group of MPs has called on the government to temporarily increase Universal Credit for 66-year-olds, warning that thousands face a 'year of hardship' as the state pension age rises from 66 to 67. The Work and Pensions Committee argues that many older people are being left in a financial squeeze, unable to work due to ill health, caring responsibilities, or physically demanding jobs, and are forced to rely on standard Universal Credit payments of around £425 a month or deplete retirement savings.
Impact of the State Pension Age Increase
The UK's state pension age is beginning a phased rise from 66 to 67, a change that will affect new retirees over the coming years. In a new report, MPs said the transition risks hitting those on lower incomes particularly hard. The committee stated: 'For 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.' The report highlights that when the pension age increased from 65 to 66, absolute poverty rates among 65-year-olds more than doubled.
Call for Temporary Universal Credit Increase
The committee is now urging ministers to consult on a temporary increase in Universal Credit for people in the year before they reach state pension age, with a view to introducing changes by the end of 2026. The proposal is intended as a short-term measure while longer-term solutions are developed. MPs acknowledged concerns about how higher benefits might affect incentives to work, but said the impact would likely be limited. 'Those out of the labour market at this point in their lives are very unlikely to return to it,' the report noted.
Gaps in Support and Inequalities
Currently, additional support such as Pension Credit is only available once someone reaches state pension age, leaving a gap for those just below that threshold. The committee warned that this gap is contributing to financial strain, particularly in more deprived areas where poor health and fewer job opportunities are more common. It also highlighted wider inequalities, noting that people in disadvantaged areas not only face a tougher wait for their pension but may also receive it for a shorter time due to lower life expectancy.
Reactions from Committee Chair and Charities
Committee chair Debbie Abrahams said the situation risks forcing people into difficult choices. '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,' she said. She added that many older workers face significant barriers to employment, including age discrimination, health issues and limited opportunities to retrain. '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,' she said.
Age UK welcomed the findings, saying the issue has been overlooked for too long. Charity director Caroline Abrahams said: '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.'
Government Response and Broader Context
The Department for Work and Pensions said it would consider the committee's recommendations. A spokesperson noted that as of February 2026, just 0.02% of Universal Credit claimants were aged 65 or 66, and pointed to existing support options, including disability-related benefits. Experts say the debate highlights a growing challenge as the population ages and retirement patterns shift. While raising the state pension age has been framed as a way to balance costs across generations, MPs argue that fairness within generations must also be addressed, particularly for those least able to keep working.
For now, the committee's message is clear: without targeted support, the extra year before the state pension kicks in could become a financial cliff edge for many approaching retirement.
