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Poverty warning for State Pension Age increase
Analysis by the Health Foundation finds raising the pension age amid high levels of economic inactivity due to ill health will worsen poverty in old age.
Increasing the State Pension age in the UK is likely to leave thousands at risk of falling into or living in poverty for longer, according to new analysis.
The Health Foundation says that the rise in the State Pension age to 67 in April 2026 will coincide with an increase in economic inactivity due to ill health.
It says an additional 235,000 people aged 53–62 – the first cohort who will retire at 67 – were out of work due to ill health in the first quarter of 2023 compared to the first quarter of 2020 – a 34% increase, compared to a 2% rise in the equivalent cohort in the previous three-year period.
The Foundation says those who are out of work due to ill health will be left on Universal Credit for a year longer due to the pension rise rather than becoming eligible for Pension Credit and that this will leave them worse off. For single working people deemed unable to work due to ill health, Universal Credit is currently £27 less per week compared with a single person on Pension Credit.
Health Foundation analysis also finds that people living in some of the most deprived areas in Scotland, the Northeast, East Midlands, Yorkshire and the Humber, are at risk of being particularly disadvantaged by the increase in State Pension age due to higher rates of ill health. For example, in Blackpool, economic inactivity due to ill health is the highest in England at 8.2% compared with a low of 1.7% in Wokingham.
The Foundation is calling on the Chancellor to take action in the forthcoming Autumn Statement to improve employment support and, from April 2026, extend Pension Credit to 66-year-olds unable to work due to ill health.
Dave Finch, Assistant Director at the Health Foundation, said: “The government’s State Pension age policy fails to acknowledge the decline in the health and work prospects for people in their 50s and 60s in the UK, leaving thousands at risk of living in poverty for longer. Prolonging poverty for people nearing retirement risks further deterioration in their health and potentially greater government costs in the long run.”
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