MPs discussed bringing in a ‘top up’ system for other benefits
MPs have considered a benefits ‘top-up’ system in light of significant changes to DWP rules. The update comes as major changes to eligibility criteria will come in from this April.
From April 2026, the age at which you can claim the state pension will rise from the current 66. The qualifying age will go up in stages to reach 67 by April 2028. Legislation has also been passed for the state pension age to rise once more, moving up from 67 to 68 between April 2044 and April 2046. There has been talk of accelerating the schedule for the shift to 68.
Policy experts addressed the Work and Pensions Committee about the looming change and its implications for people having to wait longer to claim the state pension. Committee member Rushanara Ali, MP for Bethnal Green and Stepney, asked the experts a pressing question on the matter.
Pushed into poverty
She asked what measures the Government could bring in “quickly” to offset the effects of the transition from 66 to 67, given it is less than two months away. She enquired: “Given that a number of people will be pushed into poverty, is there anything specific that you think the Government should be doing or could be doing within this timeframe?”
David Finch, assistant director at health advocacy group Health Foundation, offered some suggestions. He responded: “The most immediate and effective thing would be to top up through Universal Credit because that is something that they should be able to do quite quickly.”
He also cautioned that this matter will impact a broader range of people beyond those approaching state pension age in the coming months. He said: “This affects a cohort of people. It is not just about next year’s retirees.
“You could look to do those things, but I think you are limited in your ability to change someone’s trajectory out of work if you are acting so late at the end of the day. But that should not that mean that you do not try.”
Early access to the state pension
There were also proposals for early state pension access for certain groups. Quinn Roache, policy lead for LGBTQ+ and disabled workers at the TUC, said: “We would like people who have no realistic prospect of returning to work once they have dropped out to be able to draw their state pension sooner rather than at pension age.
“We do think that state pension age and Pension Credit should be decoupled to allow for earlier access, because we do not think Universal Credit is quite enough. It is not as beneficial.”
The standard allowance for Universal Credit claimants aged 25 or over stands at £400.14 monthly, or £628.10 for couples. Additional amounts may be available, for instance if you have a health condition or disability.
Pension Credit is available to those of state pension age. The benefit tops up your weekly income, up to £227.10 weekly for single claimants or up to £346.60 weekly for couples.
You can also receive additional amounts depending on your individual situation. Securing Pension Credit unlocks access to further Government assistance. DWP statistics indicate the benefit provides roughly £4,300 worth of support annually on average.
Plans to improve Universal Credit
Mr Roache pointed out several other changes that would improve the system. He explained: “We also think some issues with Universal Credit could be addressed to make things better.
“One thing, which I think we put in our submission, is around how much you can have in savings. We know that if you have £16,000 in savings, which you are saving for retirement, you have to whittle it down, which means that when you are in retirement, you might have to draw on Universal Credit.”
Under Universal Credit rules, if your savings or investments exceed £6,000, your entitlement decreases by £4.35 for every £250 above this threshold. Those with £16,000 or more typically become ineligible for the benefit altogether.
For Pension Credit recipients, if you have savings above £10,000, each £500 over this limit is counted as £1 weekly income, effectively reducing your income top-up payment by £1.
