A quarter of a million more people aged 60 to 64 are now living in relative income poverty compared with 2010, according to a report from the Standard Life Centre for the Future of Retirement.

The report, Jam Tomorrow? Work, finances and retirement in an era of a rising State Pension age, found that the poverty rate for 60-64-year-olds rose from 16 per cent in 2009-10 to 22 per cent in 2023-24.

This age group has experienced the most significant deterioration in income security among adult cohorts over the period.

The analysis also highlighted the sharp impact of recent changes to the state pension age.

When the state pension age rose from 65 to 66, the proportion of 65-year-olds in income poverty more than doubled, from 10 per cent to 24 per cent.

The report warned that further increases, including the planned rise from 66 to 67 starting next April, risk repeating this pattern unless targeted mitigation measures are implemented.

While many people have responded to a later state pension age by working for longer, the report finds this has primarily benefited those already in employment.

The employment rate for 64-year-olds has risen from 34 per cent in 2013 to 54 per cent today, but those who leave the labour market in their 50s and early 60s remain unlikely to return, leaving them particularly exposed to low income.

Indeed, the report showed that people out of work in their early 60s are far more likely to fall into poverty than those still in employment.

The research comes as the government prepares for the next phase of state pension age increases, which will gradually lift the age to 67 for both men and women by 2028.

It also coincides with the government’s third state pension age review and the work of the new Pensions Commission, both of which are examining the long-term sustainability and fairness of the system.

Against this backdrop, the Standard Life Centre for the Future of Retirement argued that savings to public finances from raising the state pension age, estimated at around £10bn a year once the age reaches 67, should be partially recycled into policies to support those most negatively affected.

It suggested measures including targeted funding to help people remain in good work for longer, expanded employment and careers support for people in their 50s and 60s, and better guidance to help individuals make decisions about drawing on private pension savings to bridge the gap to state pension age.

Standard Life Centre for the Future of Retirement head of research analysis and policy, Patrick Thomson, warned that the pace of change since 2010 had left a growing number of people struggling financially in the years before retirement.

“For the first 60 years of its existence, the state pension age stayed the same.

"Since 2010, it has been rising in more years than not, and a growing number of people are falling into poverty as they wait for a higher state pension age,” he said.

He noted that the next rise, from 66 to 67, would deliver significant fiscal savings but also carry “knock-on costs and consequences for poverty levels”, adding that any further increases must be matched by clear policies to support longer working lives and protect those unable to work.

“Our analysis shows over 250,000 additional 60-64-year-olds are now in pre-retirement poverty compared with 2010, and the proportion of 65-year-olds in poverty more than doubled when the state pension age moved from 65 to 66,” Thomson continued.

“Most people accept that the state pension age may need to rise over time, but it has to
be done in a way that is seen as fair between generations,” he added.

The report concluded that without targeted action, pre-retirement poverty is likely to increase further as the state pension age continues to rise, potentially undermining confidence in the long-term fairness and sustainability of the state pension system.

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