Government Statement
Ms Debbie Abrahams presented the Work and Pensions Select Committee report on the transition to state pension age, highlighting its importance given recent increases from 65 to 66 in 2020 and further rises starting this April with a peak at 67 by 2028. The report noted uneven effects of these changes, particularly affecting individuals in poor health or with limited resources. Over the past two decades, spending on state pensions and benefits has risen from 5.3% to 6% of GDP, projected to reach 9% by 2070, with over half of DWP spending allocated towards these areas. The committee emphasises the need for fairness not just between generations but within them, considering regional disparities in health and financial stability. For instance, healthy life expectancy has decreased since 2012, falling to 60.7 years for men and 60.9 years for women on average, with industrial regions experiencing even lower figures. Employment rates for those aged 65 dropped to 42% in 2025, decreasing further at 66. The committee advocates better support for older workers through healthier workplaces and flexible employment options, endorsing the Mayfield review but stressing its potential delays. They recommend consulting on an uplift in Universal Credit for those nearing state pension age to prevent hardship, estimating a cost of £600 million annually versus estimated savings of £10.5 billion from raising the pension age to 67. The report also criticises outdated impact assessments and urges comprehensive reviews considering health, employment history, income levels, and protected characteristics.