Written evidence submitted by the Policy in Practice (SPA0022)

Key messages

●         Working age poverty leads to pensioner poverty. Pensioner poverty is too often a continuation of working-age poverty.

●         An inability to work coupled with an inability to access benefits, is the biggest issue in the near-retirement cohort.

●         Councils are using data to support near-retirees with benefit take-up, wraparound support, and Pension Credit transition support. Sharing more data would help.

Introduction

Policy in Practice is a social policy software and analytics company that helps over 120 councils use benefits data to help alleviate poverty in their areas, and over 300 organisations help vulnerable citizens navigate the benefit system with our Better Off Calculator, free to the public, used over 2mn times a year and listed on GOV.UK.

In this submission, we will talk about:

1. Where pension-age poverty begins
2. Policy lens: The ability to work
3. Practice lens: Local authority support, and the role of data

1. Pension-age poverty is a continuation of working-age poverty

Pensioner poverty is fundamentally a continuation of working-age poverty.

There is a stark disparity, a “reverse cliff-edge”, where benefits increase 2.4x as you reach retirement age, from £400 / month to £987 / month as a single person with no income and no health benefits.

For many near-retirees, they are simply trying to survive until they reach pension age. The simplest and most direct implication of increasing the state pension age on this cohort has been to extend the duration on which vulnerable individuals must subsist on lower working-age benefits, effectively lengthening their time spent in poverty.

This 2.4x increase in support leads has an obvious follow-on question, is that disparity justified? The reason that pension-age support is so much greater is that there is no longer an expectation of ‘those who can work should work’, and conditionality is therefore removed.

It is absolutely right to expect people to contribute to society. But realistically many if not most of the c 700,000 60-66 y.o.’s on Universal Credit have little to no realistic prospect of being able to work. This issue should therefore primarily be seen as an “ability to work” issue.

There is a second, overlapping cohort which must be considered. The “ekeing out” cohort is often overlooked. While absent from our data so we cannot give reliable figures, we know from our work with frontline services that many near retirees are not on benefits, instead stretching out dwindling savings or making do on a partner’s income. They do this instead of attempting the gauntlet of qualifying for LWCRA and other health benefits or facing the DWP conditionality regime.

2. Policy Lens: Addressing Health-Related Inactivity

The challenges facing the 60–66 age group should be viewed primarily as an ability-to-work issue rather than an age issue.

This cohort has widespread health issues. The IFS estimate c. 29% of people aged 55-64 have a health problem[1], for 16% it’s a severe health problem. The House of Commons Library paper estimated c. 32% of the same age group have a disability[2]. There is no universal measure of health need, but nonetheless it is high in this cohort. If we crudely compare these rates, health conditions are likely to account for the majority of non-voluntary economic inactivity:

So, how does this underlying issue drive poverty?

1. Access to benefits is a persistent issue. We know that large numbers of people are missing out on benefits. Our Missing Out 2025[3] report found 8mn million families were missing out on over £24 bn of support that legislators made available, including 1.7mn families missing out on Universal Credit.

Many genuinely cannot work and the key issue is, in fact, access to the appropriate benefits (DLA, LCWRA, etc.) The barriers to these have been reviewed by this committee and are in the Timms Review. We haven’t estimated health-related benefits owing to the difficulty determining who qualifies, but we know there are large numbers of people missing out because when councils look for underclaiming in take-up campaigns, they find it. The following case study demonstrates the scale of need.

2. For those on benefits, many are afraid to lose the benefits they have. They are often unsure that they will succeed at work, and are afraid that should they lose or give up the job that they will lose their health-related benefits. And for many passported benefits that require manual applications, e.g., council tax reduction, these are lost unless they reapply for them. Backing this up, work by Camden Council[4] with people designated as LCWRA  found that the three most prevalent barriers to returning to work were:

●         Fear of losing benefits

●         Employment support is unclear or seen as coercive

●         Health condition makes it hard to know what is manageable

Ill health is not the only issue faced by this cohort. Though less close to our area of work, we also note:

3. Ageism: Labour market discrimination remains a significant barrier to labour force re-entry for older workers. This is outside our expertise so I will refrain from commenting further

4. Diminished ROI: The return on investment of supporting older workers with health and training needs becomes progressively worse for employers, DWP, and people themselves as their payback period, i.e., the time until retirement, shortens.

Working through each of these in turn:

1. Access to benefits for those genuinely unable to work: The Timms review should explicitly consider take-up issues of health-related benefits in the near-retirement cohort, and whether alternative approaches are relevant for this cohort.

2. Concern over loss of benefits: The government has already introduced its “right to try” guarantee, however we have reservations the guarantee does not go far enough. The Mayfield Review should consider whether further protections are required to address concerns over loss of benefits. To address take-up of other benefits, DWP should share Universal Credit data on all citizens with councils.

3. Persistent ageism: The Mayfield Review must emphasise keeping people in work, and rapid support to re-enter the workforce if a job is lost. Once an individual in this age group is out of work for six months, their incentive often shifts from job-seeking to merely surviving until retirement.

4. Diminished ROI: The Mayfield review should consider how much is reasonable to invest in this cohort, and how the conditionality regime should be less stringent when both opportunity and investment is lower.

December 2025

3. Practice lens: Local authority support, and the role of data

We have already profiled above case studies of councils supporting take-up of health-related benefits by residents, which is one of the most impactful ways councils can support near-retirees. There is another key way that councils are supporting their residents, which is helping them transition to Pension Credit.

If the committee was interested in expanding such support, our asks would be:

●         Sharing Universal Credit data on all residents with councils - both the case studies above rely on Universal Credit data. DWP shares data on just 40% of UC recipients for an average council, withholding it for 60%, as a result of a historical policy decision and despite powers (legal gateways) existing for decades that would permit DWP to do so. DWP has committed to sharing this data, originally by 2026, which may now slip to 2027. Hundreds of thousands of people will live in avoidable poverty as a result. We would ask: given the government’s ambitions to better use digital and data, what are Ministers doing to accelerate delivery of such data sharing?

●         DWP to communicate with near-retirees - why does DWP not run its own campaign for near-retirees like the case study above? As ever, we would recommend collaborating with local councils so people can get the personalised, holistic support only councils can provide.

●         Sharing data on 100% of Pension Credit recipients - Once people reach state pension age, this data is used to identify people missing out on support available to them. Currently, DWP shares data for only ~75% of Pension Credit recipients with councils (those receiving Housing Benefit), and withholds data on 25% of recipients. We ask how this two-tier system, where 1 in 4 pensioners on low income, are denied this avenue of support by their councils, can be justified?

●         Risk of losing all Pension Credit data: DWP risks repeating the Universal Credit  mistake where only 40% of data is shared because of a historical decision with Pension Credit as it merges Housing Benefit and Pension Credit administration. We have received no assurances from DWP that it has recognised this issue. Could DWP confirm that it intends to increase, not decrease, data available to councils?

●         Proactive HMRC/DWP outreach on Pension Credit: As raised to the committee in February, DWP’s Pension Credit takeup campaign reached 100-120,000 people missing out on Pension Credit, a fraction of the 760,000 we estimate are missing out[6]. This is because DWP and HMRC did not work together to share state and occupational pension data, which could have revealed far more eligible people. We ask why DWP & HMRC don’t do this?

Conclusion

Reiterating our earlier points:

●      Pension age poverty starts with working age poverty, with many of the unemployed near-retirees unable to work yet not on health or disability benefits. Access to these benefits should be improved.

●         Support by councils to take-up health related benefits and to transition onto Pension Credit is invaluable.

●         Councils should be trusted with more data, given that legislators long-ago created the necessary legal gateways

About Policy in Practice

Families on the lowest incomes have the most complicated finances, often because government departments aren’t able to talk to each other effectively. 

Policy in Practice sets out to make government policy simple to understand, empowering people with the clarity and confidence they need to make positive decisions. As a team of policy experts, we have developed services that overcome departmental silos to help people to tackle rising living costs and build resilience, enable councils to be proactive and track the impact of their intervention, and improve safeguarding decisions while saving social workers’ time. 

Better Off is a software tool used by millions of people and thousands of advisors each year to help assess eligibility for the widest possible range of support without needing to be experts in the benefit system. It is free for individuals and available for advisors as an API and a self serve tool for their organisation’s website. 

LIFT (Low Income Family Tracker) is an analytics platform used by nearly a hundred local authorities. It combines their benefits administration data with advanced analytics to identify and support people with low financial resilience. It enables councils to increase take up of financial assistance to prevent homelessness, arrears and to increase take up of support. 

MAST (Multi Agency Safeguarding Tracker) is a service backed by the LGA and NHS Digital that links data across adults, childrens, fire, police and health on a daily basis. This helps frontline staff to proactively identify where there are multiple contacts with the same individual or family to make better informed safeguarding decisions.

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