A damning report by the Institute for Fiscal Studies out today reveals that the increase in the state pension age from 65 to 66 has condemned many more retirees to poverty.

The report found nearly 100,000 more people were pushed into poverty by the rise but only 60,000 managed to work longer.

Former Pensions Minister Baroness Ros Altmann calls the revelations “shocking” and has urged a rethink of state pension age policy.

The IFS report investigated how increasing the state pension age from 65 to 66 between December 2018 and October 2020 affected household incomes.

The IFS said the increase in state pension age has had a major impact on retirement income.

Key findings from the IFS report are:

• 65-year-olds lost – on average – state pension income worth around £142 per week in 2020–21

• Accounting for all forms of income, including state pensions, earnings, other benefits, private pensions and investment incomes, the increase in the state pension age pushed down the net income of 65-year-olds by an average of £108 per week.

• The reductions in household incomes have had a particularly important effect on lower-income households: they have caused significant increases in income poverty rates among 65-year-olds.

Baroness Altmann said Government should rethink State Pension policy to reflect the near 20-year difference in healthy life expectancy between better-off and least-advantaged groups. She wants a State Pension Age review to consider more flexibility in starting ages to account for ill-health, disability, long contribution records or caring.

She said huge variation in health life expectancy between better off and worst off areas meant the state pension was no longer fair to everyone.

She said: “These shocking findings show damage caused by increased State Pension Age. The latest research released today by the Institute for Fiscal Studies, shows that the increase in State Pension Age to 66 has caused poverty rates for 65 year-olds to more than double.

“These findings are truly shocking, with the delay in their state pension starting age leaving one in four 65-year-olds in poverty.  Even those with seriously shortened life expectancy and up to 50 years contributions to National Insurance, cannot receive a penny of State Pension early.”