Treasury should ‘use state pension savings to help older workers’

The Treasury has been accused of pocketing £5bn from state pensionage increases that should have been used to help struggling older workers.

A report from think tank Phoenix Insights, published this week, said the Government clung on to the £4.9bn saved by raising the state pension age. The money should have been used to help those who cannot afford to wait another year for retirement, it said.

The age at which you can receive the state pen sion was gradually increased from 65 to 66 on a monthly basis starting from March 2019.

Two further increases have been set out in legislation – a rise to 67 for those born on or after

April 1960 should come into effect by 2028. And a rise to 68 between 2044 and 2046 for those born on or after April 1977.

However, many in ill health who cannot work or who have been victims of age discrimination in the workplace will struggle to make ends meet for an extra year before the state pension pays out.

Older workers were in the firing line of mass redundancies during the pandemic. Many of the newly unemployed have been forced to retire early and will be obliged to wait longer to receive their much- needed state pension.

Almost six million pensioners rely on the state pension for the majority of their income during their retirement. The think tank’s Catherine Foot said the Government needed to act now to protect future generations from poverty.

Between 10pc and 20pc of the savings should be used to cushion the impact on those hit hardest by the increase, and boost opportunities for older workers, she said. “Reinvesting the money can help more stay in work longer and support those for whom that is simply not feasible,” she added.

A spokesman for the Department for Work and Pensions said: “We know that older workers, including those approaching state pension age, are a huge asset to our economy while for those who can’t work, we provide a strong welfare safety net, which includes Universal Credit.