State pension ‘must be flexible’ – calls grow for early access to sum | Personal finance | Finance


Currently, individuals can access their state pension at age 66, but this age is increasing. Increases to 67 and further to 68 have been confirmed, but the speed at which this will happen is up for review.

Now an expert firm has suggested a different approach to the state pension and how it is delivered.

Aegon asked the government to investigate offering the flexibility to start taking the state pension up to three years earlier.

This would be at a reduced rate to ensure financial fairness for all, but to provide more support for those who wish to access it at an earlier age.

The organization suggested this could be a good approach to the rising retirement age, which has worried some due to personal circumstances.

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Steven Cameron, director of pensions at Aegon, said: “Rather than a single ever-increasing age, we are calling on the government to explore the possibility of giving individuals more choice as to when they can start claiming.

“The higher the statutory retirement age, the more difficult it will be for individuals to remain in full-time employment. This may be due to health, physically or mentally demanding work, or caring responsibilities to relatives. aged.

“A fixed, ever-increasing state retirement age could become increasingly divisive and out of step with today’s world of flexible private pensions.”

At present, Britons can choose to defer their state pension if they are not yet ready to claim it.

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In return, they’ll usually get a higher monthly payment when they decide to get it – provided they’ve deferred for at least nine weeks.

However, there is currently no reverse option: starting the state pension at an earlier age, possibly at a reduced rate.

Mr Cameron continued: “We support giving people the choice to draft it three years early, at a reduced amount to make it financially fair for everyone.

“Historically, people’s lives have followed a pattern of education, gainful employment, and then retirement.

“But as people live longer, the trend may be towards a more varied multi-stage life with more varied careers and ‘breaks’ from paid employment to retrain, care for others or enjoy life. other life experiences.

“People already increasingly prefer to ‘pass’ into retirement, combining part-time work with a modest retirement income, often well beyond ‘retirement’ age.

“This is another reason why now is the time to start thinking about how the public pension can be made more flexible to reflect our future lives.”

However, if an early-access state pension is introduced, Mr Cameron acknowledged it could have implications for some.

This is particularly the case for people applying for means-tested benefits, as receiving an early pension could affect their eligibility for assistance.

As such, he said some people may need to seek advice or help from the government-backed service, Money Helper.

Nonetheless, with self-enrollment continuing to grow by leaps and bounds, more and more people are focusing on a workplace retreat or their own arrangements.

As a result, it could mean that fewer people depend on the public pension as a whole.

The idea of ​​a state pension with early access is debated.

A number of readers have recently weighed in on the issue, offering their thoughts.

User @knights said: “I think moving the retirement age to 67 so soon after it was 66 is hugely unfair. When I was in school I understood that I would retire at 60, but because I am a woman, it was moved to 65!

“It just went up to 66 and before I hit 66 the retirement age will go up to 67. That’s a whopping seven years added to my expected retirement age.”

@Tonto58 added: “The whole system is a fiddle. They shouldn’t be allowed to change ages.

However, @CHiPs didn’t seem convinced that a flexible age would be the right choice and said: “There’s no point in getting the pension earlier at a reduced rate. The normal rate is below the threshold of People say they can’t live on minimum wage, but people who apply for a state pension have to live on half the minimum wage.

A DWP spokesperson recently told “The state pension forms the basis of retirement planning and financial security for older people.

“The government is required by law to review the retirement age regularly and has launched the second retirement age review. This will examine whether the state’s retirement age rules are appropriate, based on a wide range of evidence, including the latest life expectancy data and two independent reports.


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