Rise in State Pension age leaves thousands at risk of poverty

New analysis published today by the Health Foundation has found that increasing the State Pension age in the UK will leave thousands at risk of falling into or living in poverty for longer.

While previous increases have resulted in people staying in work for longer, the rise in the State Pension age to 67 in April 2026 comes at a time when there has been a sustained rise in people out of work because of ill health.

An additional 235,000 people aged 53–62 (the first cohort of people affected by the upcoming rise to State Pension age) were out of work due to ill health in the first quarter of 2023 compared to the first quarter of 2020. This represents a 34% increase, compared to a 2% rise in the equivalent cohort in the previous three-year period.

As a result of the increase in the State Pension age, people who are out of work due to ill health will be left on Universal Credit for a year longer rather than becoming eligible for Pension Credit. 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. 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.

Without sustained policy action, the analysis shows that State Pension age policy is set to exacerbate existing health inequalities at a time when increasing numbers of people are living with major illnesses and improvements in life expectancy have stalled. To mitigate this, the Health 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.

The upcoming Autumn Statement presents a critical opportunity for the Chancellor to alter the current path faced by groups nearing State Pension age. The risk of spending longer in poverty can be reduced by providing the equivalent of Pension Credit support for people aged 66 years from April 2026, while increasing the scale and speed of access to employment support can better support those with long-term sickness back to work.”

Media Contact
Billie Morgan
Billie.morgan@health.org.uk
020 7257 8000
0790 8637 666