Tackling pre-pensioner poverty: The critical policy interventions needed now

The Work and Pensions Committee’s “Transition to State Pension Age” report published this weekend made several findings and recommendations. We were delighted to see our written and an in-person submissions to the report reflected in the report’s recommendations.

The impact of raising the state pension age will be deeply uneven

The rise to 67 will not affect everyone equally. By age 65, only 42% of people remain in work. Those who have left employment are disproportionately people in poor health, those with caring responsibilities, and those in lower-paid, physically demanding roles. The committee’s recognition that wealthier individuals retire by choice, while those on lower incomes leave work due to ill-health was highlighted in our submission.

Calling for additional social security support

The committee recommended an increase to Universal Credit (UC) a year before State Pension age. The committee concluded that the government’s current focus on communication and encouraging later working is insufficient, as the previous increase (from 65 to 66) more than doubled absolute poverty rates among 65-year-olds.

We argued that the Universal Credit standard element should be liveable, no matter one’s age, but of course we welcome any increase in the standard element.

A lack of data drives flawed policymaking

The committee explicitly stated that the 2011 and 2013 impact assessments were “outdated and insufficient.” No evaluation is planned until after the increase is complete in April 2028, by which point, for many, the damage will already be done.

Pension-age poverty is a continuation of work-age poverty

We argued that pensioner poverty is fundamentally a continuation of working-age poverty. A stark “reverse cliff-edge” exists where benefits increase 2.4x at retirement age (from £400 to £987 per month for a single person with no income). For many near-retirees, the rise in State Pension age has simply extended the period during which vulnerable individuals must subsist on lower working-age benefits.

The benefits access problem

The committee drew on our evidence on benefit take-up. Taking up increased support when you become a pensioner can directly reduce pensioner poverty. For example, Pension Credit is worth more than twice as much as the standard allowance of Universal Credit.

Access to benefits is a structural policy issue, not just a communications challenge. We know 8 million families are missing out on support. Our Missing Out 2025 report found that those 8 million families are  missing out on more than £24 billion, including 750,000 families missing out on Pension Credit and 1.7m missing out on Universal Credit. With underclaiming at this scale, despite years of mass-marketing communications campaigns, we must acknowledge that different approaches like targeted communications or automatic enrolment are needed.

The story doesn’t stop with Pension Credit. Many people cannot work and need help accessing health-related benefits, such as PIP and LCWRA. The councils we work with regularly find large numbers of eligible people missing out when they run take-up campaigns. The case study below shows the scale of this need.

Case Study: Attendance Allowance take-up

In 2024, the Greater London Authority partnered with Policy in Practice to run a data driven pilot campaign to increase the take up of Attendance Allowance in five London boroughs. Nearly 5,800 households were contacted and 240 went on to claim Attendance Allowance, worth £1.1m annually, or £7.1mn in lifetime value.
Though a pension-age cohort, it shows the extent of underclaiming of health-related benefits. This point was reinforced by one council which invested heavily in follow-up and saw a take-up rate 3x those of its peers, demonstrating the barriers people face to accessing essential support.

One council worker told us about a resident unable to cover energy bills or taxis to hospitals:

“If this resident hadn’t received the … letter explaining what Attendance Allowance is, it’s very unlikely that she would have contacted me to discuss her income. After being supported to claim Attendance Allowance and other related benefits, she received an extra £250 a week in benefits, allowing her to use taxis for her frequent hospital visits and can now meet her high energy bills. She told me that the extra money was a lifesaver.”

The conditionality regime

The conditionality attached to people in their early-to-mid sixties is not appropriate for people with health conditions. Many of the approximately 700,000 people aged 60–66 on UC have little to no realistic prospect of being able to work. This issue should therefore primarily be seen as an “ability to work” issue, yet they face a conditionality regime designed for those with a credible path back into employment.

Making data sharing an operational priority

Policy in Practice identified three critical data gap in their evidence to the committee:

• Pension Credit and Universal Credit data coverage: DWP shares data with councils for approximately 75% of Pension Credit recipients (those also receiving Housing Benefit). The remaining 25% are invisible to councils, denying them the opportunity to identify and support people missing out on further entitlements. Likewise, DWP only shares Universal Credit data on households receiving support under council tax reduction schemes.
• The Housing Benefit-Pension Credit merger: The DWP plans to merge the administration of Housing Benefit and Pension Credit over the next few years, but details are scant. Policy in Practice warns of the risk that Pension Credit data sharing could regress to the same 40% coverage currently seen with UC. The submission explicitly asks DWP to confirm it will widen sharing with councils to all households on means-tested benefits. 
• HMRC-DWP collaboration on Pension Credit take-up: DWP’s Pension Credit take-up campaign reached an estimated 100,000–120,000 people. Policy in Practice estimates that 760,000 people are missing out on Pension Credit. The gap exists, in part, because DWP and HMRC do not share state and occupational pension data to identify eligible individuals. The submission asks directly why this is not happening.

Improving the process and awareness for early Pension Credit applications

People can apply for Pension Credit up to 17 weeks before reaching State Pension age, preventing income gaps of up to nine weeks. 

Policy in Practice has helped local authorities reach people as they reach state Pension Age, with this capability built into the LIFT platform ahead of take-up campaigns for Winter 2026.

Case Study: Targeted campaigns offering transition support 

Applying for Pension Credit can be a time-consuming and difficult activity, and people then face a gap in income for c. 9 weeks as their claim is assessed and potentially far longer if an issue is found. This can be catastrophic for people living in poverty and dependent on benefits.

People can apply for Pension Credit 17 weeks (c. 4 months) before they reach state pension age. This gives people more time to get the form right, avoids a gap and delivers a boost in income.

We work with dozens of councils to identify people eligible for Pension Credit, including people on Universal Credit about to reach state pension age.

The “Ekeing-out” cohort – Tackling age discrimination and supporting older workers back into employment

Older workers face hiring discrimination and lower training ROI as retirement nears. Those unemployed for over six months often stop job-seeking and focus on surviving until retirement. Many will try to “eke out” a living rather than face DWP’s conditionality regime, choosing to survive off a partner’s income or running down their savings, but leaving themselves with little reserve in retirement.  The priority should be to keep older workers employed, offer rapid re-entry support, and ease job-seeking conditions for people nearing state pension age to reflect the difficulty of helping  this group to find work.

Pensioner poverty begins at working age, and solutions must too.

Rapid change can be achieved by focusing on:

1. Improving access to health and disability benefits for people aged 60–66 who are unable to work
2. Enabling local councils to do more by sharing data on all households on means-tested benefits
3. Help near-retirees: The report calls for early access to Pension Credit, funded by the increase in the state pension age. In the meantime, the DWP can help older working age people to avoid punitive conditionality and the complexity of the benefits system.

Councils are leading the charge in helping older people to access support, but they can’t fill the gap alone. With better data, they could do considerably more.

What is the State Pension age in the UK in 2026?

The State Pension age began rising from 66 to 67 in April 2026, with full implementation expected by April 2028 (See State Pension Age timetable for details).

Why does the rise disproportionately affect people on lower incomes?

People on lower incomes are more likely to have left work before State Pension age due to ill-health or caring responsibilities, have fewer savings, and have shorter healthy life expectancy.

What is Pension Credit and who is eligible?

Pension Credit is a means-tested benefit for people of State Pension age on low incomes. Policy in Practice estimates that approximately 760,000 eligible people are not claiming it.

Can you apply for Pension Credit before reaching State Pension age?

Yes. People can apply up to 17 weeks before reaching State Pension age, preventing an income gap during the assessment period, which averages approximately nine weeks.

What is LIFT?

LIFT (Low Income Family Tracker) is an analytics platform used by over 100 local authorities to identify and contact residents missing out on financial support, including Pension Credit and Attendance Allowance.