Give some State Pensioners early access

Pension provider Aegon has urged the Government to consider a more flexible State Pension age and allowing early pension access to some people amid fears of further “significant” increases in the State Pension age up to 74 and the risk it could cause harm to many. Aegon believes that giving some people in need access to a reduced pension up to three years early could help fend of hardship and be fairer as the State Pension age rises inexorably. The State Pension Age is currently paid at 66, rising to 67 between 2026 and 2028. Current plans will see the State Pension age rise to 68 between 2044 and 2046 but some have urged an earlier rise or even a rise in the age to 72 or even 74. Aegon believes that the growing cost of the Government commitment on the Triple Lock and rises in lifespan could see many pension savers eventually having to wait until their mid-seventies to claim their State Pension. Aegon says the Government should explore offering more choice over when people can start claiming their State Pension. It is making its plea now amid speculation that if a future Government commits to retaining the state pension Triple Lock further increases to the state pension age, up to age 74, may be needed to keep costs under control. Aegon believes that there is a case to give some people earlier access to the State Pension in return for a reduction in weekly amount paid to make it financially fair to all. Aegon pensions director Steven Cameron said that the Triple Lock was becoming increasingly expensive. The Triple Lock will mean State Pensions rising by 8.5% this month, significantly above the increases paid by many private schemes. Mr Cameron said: “Those above or close to state pension age may be hoping that all parties will commit to retaining the state pension Triple Lock in their pre-election manifestos. But this comes at a high cost to those of working age. “The State Pension age is due to increase to 67 in 2028 and currently, the plan is to increase it further to age 68 by 2046 but this could happen sooner. There is now speculation that if a future Government commits to retaining the State Pension Triple Lock, and set against likely future rises in life expectancies, further significant increases in State Pension age may be needed to keep costs under control. “State pensions are a very costly part of Government expenditure and deferring when they start being paid would save Government, or future taxpayers who fund them, significant money. But these increases will be of major concern to those who simply feel unable to keep working till late into their 60s or into their early 70s. “Rather than an ever-increasing single age, we’re calling for the Government to explore offering individuals more choice over when they can start claiming.” Mr Cameron said that he believed that the higher the state pension age, the more individuals will struggle to stay in work, with increasing numbers of over 50s exiting the workforce due to ill-health. He added: ”An ever-rising fixed State Pension age could become increasingly divisive and out of sync with today’s flexible private pensions world.” “While individuals can already choose to defer their state pension in return for a higher monthly payment, there’s no flexibility to start it from a younger age. We support giving people the choice to draw it 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. “A more flexible approach to state pension age would not only meet the more varied ways people now live their ‘Second 50’ including when they retire but would also go some way to alleviate the concerns of an ever increasing ‘standard’ state pension age.”

Give some State Pensioners early access - Aegon urges

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