The work and pensions select committee has issued a stark warning to the Department for Work and Pensions (DWP), urging it to scrap the £425-a-month rule for claimants born before 1961. The committee warns that older workers will need more benefits as the state pension age rises, and that increasing the age without additional support risks putting retirees in a worrying financial situation.
Rising state pension age leaves older workers vulnerable
The state pension age currently stands at 66 for both men and women, but is being gradually increased to 67 over the next two years. The committee, chaired by Labour MP Debbie Abrahams, called on ministers to consider actions to protect those affected. Among the recommendations was raising the level of Universal Credit granted to 66-year-olds, due to fears that a growing number of people will fall below the poverty line.
Ms Abrahams 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.”
Universal Credit standard rate of £425 a month
The committee highlighted that the increase in the state pension age means a growing number of 66-year-olds, born before 1961, may have to rely on the £425-a-month standard rate of Universal Credit for longer, rather than being eligible for pension credit. This places them at greater risk of financial hardship.
Andrea Barry, from the Centre for Ageing Better, a charity, warned that the Government “should have been prepared” for the effects of the rise in the state pension age. She added: “At present, too many people are left to sink or swim by themselves as they approach state pension age.”
DWP responds to committee recommendations
A spokesman for the Department for Work and Pensions 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.” The spokesman noted that as of February, only 0.02% of Universal Credit claimants were aged 65 or 66, suggesting the immediate impact is limited but could grow as the pension age rises.
