State pension age increase to 67 and rising poverty risk in the UK, Digi Mart USA News (United Kingdom): Labour’s failure to support people affected by this year’s increase in the state pension age has been branded “impractical and cruel” after warnings that more than 100,000 people could be plunged into poverty.
MPs reacted angrily after the Government suggested that people affected by the rise to 67 could be offered “tailored employment support” to help them find work. Debbie Abrahams, the Labour chair of the Commons Work and Pensions Committee, condemned the proposal in a letter to pensions minister Torsten Bell.
She said: “Offering the prospect of a job to someone in the year before state pension age, who has been waiting years for a hip, knee or cataract replacement, is impractical and cruel.”
Campaigners accused ministers of abandoning people who were forced to leave work due to ill health or caring responsibilities for a loved one. Eamonn Donaghy, chief executive of the National Federation of Occupational Pensioners and a spokesperson for Later Life Ambitions, said raising the state pension age cannot be treated simply as a question of keeping people in work for longer.
Donaghy said the Government must recognize that some people cannot extend their working lives and must ensure they are not pushed into poverty as a result. He added that the Government is failing to address the very real risk that raising the state pension age to 67 will push more older people into poverty.
He said additional employment support is “all well and good” but is no substitute for meaningful financial protection for those who are simply unable to work any longer.
The state pension began rising gradually from 66 in April and will reach 67 in April 2028. The Commons Work and Pensions Committee has warned that making people wait longer can affect their quality of life for years to come.
The extra 12 months before they can claim the state pension also extends the period during which they must rely on savings that might otherwise have supported them in retirement.
Research by the Institute for Fiscal Studies found that the last age change, from 65 to 66 between 2018 and 2020, increased the number of people aged 65 living in poverty by 100,000. Experts at Age UK and Independent Age warned MPs that the figure among 66-year-olds would be higher this time.
In her letter to Mr Bell, Ms Abrahams said the committee now has a clearer picture of the likely impact of the increase to 67. She noted that the previous rise from 65 to 66, between late 2018 and 2020, caused poverty rates among 65-year-olds to more than double.
She said the committee feared the impact may be even greater this time, given that those affected would be a year older.
Only 42% of the population are in work at age 65, and just 29% at age 66. While some wealthier people choose to retire, many people on lower incomes are forced to leave work because they or their spouses are in poor health.
The committee has called on the Department for Work and Pensions to increase benefits such as Universal Credit for people approaching state pension age.
About 800,000 people become eligible for the state pension each year, and that number is rising as the older population grows.
