UK DWP faces sweeping pension reforms and compensation claims

Members of Parliament have urged the Department for Work and Pensions (DWP) to raise Universal Credit for people born before 1961, warning that the rising state pension age could push pre‑pensioners into poverty. The government has also confirmed the Pension Schemes Act, projected to add up to £29,000 to retirement pots for around 22 million UK workers by improving investment performance and lowering fees.

The DWP announced that state pensioners under age 77 whose National Insurance numbers end in 80‑99 will receive two payments in July, totalling up to £1,930 because the month contains five Fridays. Labour Chancellor Rachel Reeves said anyone receiving only the basic state pension will be exempt from income‑tax charges until 2030, keeping the pension below the £12,570 personal allowance.

Parliamentary inquiries have uncovered a faulty pension‑forecast tool that over‑estimated entitlements for as many as 800,000 people. MPs are now demanding compensation for those who may have made work‑or‑saving decisions based on the inaccurate projections. The DWP pledged to consider the committee’s recommendations and has fixed the online calculator.