Labour has announced the next review of the state pension age
A pensions specialist has proposed allowing early access to the state pension with reduced payments. The debate over state pension access age has been in the headlines following Labour’s announcement of the next review into the policy.
Currently set at 66 for both men and women, the qualifying age will rise to 67 gradually between April 2026 and April 2028, before climbing to 68 from 2044 to 2046. Experts at wealth management company Aegon believe a more flexible system should be introduced enabling earlier access to payments.
Pensions director Steven Cameron said: “We support giving people the choice to draw it say up to three years earlier, at a reduced amount to make it financially fair for all. An alternative would be to commit to allowing access from not later than say age 68, at a lower amount, even if the state pension age increases thereafter.”
He pointed out that while people can postpone claiming their state pension beyond the qualifying age for potentially higher returns, no provision exists for early access to DWP benefits. The previous state pension age review, conducted by Baroness Neville-Rolfe, recommended early access for certain demographics.
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However, Mr Cameron is sceptical about this approach. He said: “We believe giving special terms to particular groups would be extremely difficult to implement fairly. Who would decide which ‘jobs’ qualified?
“How would this be monitored? Instead, we favour the Government exploring allowing everyone the option to access their state pension a little earlier, at a reduced level to make financially fair.”
Looking at the forthcoming review of the state pension age, Mr Cameron said that key factors likely to be discussed include the state pension’s affordability and its long-term viability. He outlined some of the challenges involved: “The state pension is highly valuable, but also highly costly to provide. It is not funded in advance but paid for from income tax and National Insurance of today’s workers.
“Because of increased life expectancy, the number of people living longer is increasing and the number over state pension age is also rising as a proportion of those of working age. So costs need to be controlled.” He suggested one element that will push the Government towards raising the state pension age is the way the triple lock continues to inflate the state pension bill.
This policy guarantees the state pension rises annually in accordance with whichever is highest: 2.5 percent, wage growth, or inflation. State pension rates increased by 4.1 per cent this past April under the policy, bringing the full new state pension to £230.25 weekly.
