The decision to raise the age at which individuals may claim pension benefits in the United Kingdom has driven over 100,000 additional people into poverty, accounting for one-in-eight of those affected by the move.
The findings, published in a report by the Institute for Fiscal Studies and the Center for Aging Better, put pressure on the government to expand the social safety net for the most vulnerable.
It revealed that persons with lesser levels of education and those who live in leased housing are the ones who suffer the most, adding to larger worries about a cost-of-living pressure on household earnings.
“These figures are startling,” Emily Andrews, deputy director of the Center for Ageing Better, said. “They indicate that the proportion of 65-year-olds in absolute poverty climbed from one-in-ten before the state pension age doubled to nearly one-in-four just two years later.”
Between late 2018 and the end of 2020, the UK raised the state pension age to 66 from 65. About 700,000 people on the verge of obtaining benefits were left out of a weekly income of around £142 ($174).
60,000 individuals, or around 9% of those surveyed, chose to stay in their positions longer. According to the IFS, the government saved £4.9 billion a year as a result of the shift due to more tax income and fewer benefit payouts, which is about 5% of annual government pension spending.
“Raising the state pension age is a cogent government reaction to rising life expectancy,” said Laurence O’Brien, an IFS research economist. “However, it has a negative impact on household finances.”