700,000 missed out on weekly income after pension age rise

The finding, in a study by the Institute for Fiscal Studies and the Centre for Ageing Better, puts pressure on the government to extend the social safety net for those who are hit hardest

Britain raised its state pension age to 66 from 65 between late 2018 and the end of 2020. That meant about 700,000 people on the brink of receiving benefits missed out on income of about £142 ($174) a week.

The UK’s decision to raise the age at which people can claim pension benefits pushed almost 100,000 more people into poverty – one-in-seven of those affected by the change.

The finding, in a study by the Institute for Fiscal Studies and the Centre for Ageing Better, puts pressure on the government to extend the social safety net for those who are hit hardest.

It showed that people with lower levels of education and living in rented accommodation were most likely to suffer the biggest living standards decline and adds to broader concerns about a cost of living squeeze on household incomes.

These statistics are shocking and show that the number of 65-year-olds in absolute poverty rose from one-in-10 before the state pension age increased to almost one-in-four just two years later, said Emily Andrews, deputy director of the Centre for Ageing Better.

About 9 per cent of those people, or 60,000, decided to stay in their jobs longer. The government saved about £4.9 billion ($6.00 billion) a year as a result of the change through higher tax revenue and lower benefit payouts, which is about 5 per cent of annual government spending on pensions, according to the Institute for Fiscal Studies.

Increasing the state pension age is a coherent government response to increasing life expectancy, according to Laurence O’Brien, research economist at the Institute for Fiscal Studies. But it does weaken household budgets.