In fact, the AOW age has been increased from the age of 65 (eventually it will be increased to 67) to ensure the ratio of working population to retired workers is large enough to keep the system sustainable. Even covering just two extra years was considered too expensive. Obviously extending the system by another 47 years would be a huge challenge.
The OP mentioned nothing about that, do you mean "my main concern around UBI"?
FWIW I've never seen a UBI study that has actually found a statistically significant decrease in working among anyone but mothers with young children and kids in school. Granted there's no increase either as some UBI proponents have suggested. It seems to be pretty neutral.
If they weren't getting any pension (aka not having worked their entire life), they'd get welfare, which is about 1000€/month. They'd only have to work if they wanted e.g. a larger flat, or more luxuries. I assume the same is true in the Netherlands: if you get AOW and you want two cars, they don't double your pension but you're free to work and earn money to afford those cars.
The trouble of course is in expanding those programs unconditionally to everyone. If you can get by well enough with 1200€ in the Netherlands, why would a 20yo not opt to live off of the expanded AOW instead of working?
The AOW is a baseline, to keep you from being homeless or starving to death or having to beg for money.
For your last question: there are also people who are content with whatever welfare they get now and don't even try to work to better their lives. Even though everyone could do this it seems almost no one does.
1. AOW, the state pension
2. Private pension system regulated by pension law
3. Individual private pension
Slight nitpick on the AOW, you don't need to live in the Netherlands for at least 40 years. It's by rate, so if you lived 20 of the 40 working age years in the Netherlands you will receive 50% of the AOW (even if you leave the Netherlands).
In my own east european country, we have a stable Roma population (about 10%), of which cca 98% never work. They already rely completely on welfare system, to the point of making enough children to have large support payments (families with 10 kids are common, 15 is not unheard of, although kids are sometimes running around bare naked in the snow).
I can imagine quite a few countries would literally stop if given the option to just now work
There are no conditions except for having lived (not worked) in the country for at least 40 years of the 65.
This is basically UBI for elderly and it has been in place since the 1960s.
None of the (theoretical) issues you named have been a problem.
Do some elderly spend all their AOW on a slot machine as soon as it comes in? Sure.
Do some people try to scam elderly because all elderly get AOW? Sure.
But overall the program has resulted in <3% of all elderly living below the poverty line. In other countries without this, such as Germany, you can find older people still having to work well into their 70s to get by.