'A case for Rishi Sunak to grant early access' to state pension 'bedrock' amid age changes

State Pension age could be reviewed due to pandemic says expert

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The firm said any option to take the UK state pension early would have to be subject to a reduction in its weekly amount to make it financially fair.

This would be an inversion of the rule whereby people can increase their state pension by deferring claiming it.

Steven Cameron, Pensions Director at Aegon, said: “The state pension is the bedrock of many people’s income in retirement. As the current debate around the state pension triple lock has shown, it’s also hugely expensive for the Government to provide.

“This is why, with people generally living longer, the state pension age is gradually being increased to avoid further increases in the costs, which are met from the National Insurance contributions of those of working age.”

The state pension was introduced in 1948, when the state pension age (SPA) was 60 for women and 65 for men, but since the 1990s this gender disparity has been equalised and the state pension age for both men and women increased from 65 to 66.

The state pension age is again set to increase to 67 by 2028.

Elderly man

There is a lack of pension freedom in the state pension (Image: Getty)

It has even been touted that the state pension age may reach 70 in the not-so-distant future.

Mr Cameron said: “But the older the state pension age is, the more difficult it will be for some in stressful or manual occupations to keep working until state pension age.

“There is a case for Government to explore allowing people to choose to take their state pension from an earlier age, perhaps 63, but at a reduced amount to reflect the fact it is starting earlier and will be paid for longer.

“Offering early access at a reduced level could be a big help to many thousands. It’s already possible to defer taking state pension in return for an increased weekly amount.”


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Mr Cameron contrasted the lack of freedom in choosing how to take the state pension with private pensions, where he said it has proved “hugely popular” to give people more control over their pension.

Here, people have more freedom in choosing when to take their pension, how much they take to begin with and in exactly what form.

When it comes to private pensions, people can withdraw as a lump sum (25 percent of which is tax free), buy an annuity or withdraw it more gradually or, indeed, a mixture of these.

An annuity is a guaranteed lifetime income that usually lasts until one’s death although terms differ between different providers.

“But this is not mirrored in the state pension where despite the state pension age increasing, there is no flexibility to choose to take it early,” Mr Cameron said.

He added: “This wouldn’t be without challenges and there would need to be a way of making sure people don’t end up with an income from state and private pensions below the means tested benefit level.

“Some checks and balances might be required but with some creative thinking, this issue shouldn’t be insurmountable and would be well worth the prize if it helps people with their transition into retirement.”


What is the state pension? (Image: Express.co.uk)

The state pension age is a particularly tough issue for policymakers due to demographic shifts that are showing no signs of slowing down.

When the state pension was introduced in 1948, people on average spent under a quarter of their lives in retirement.

However, today people tend to live over a third of their lives in retirement.

This, coupled with generational trends which mean fewer younger people are having to support more older people, is necessitating repeated increases to the state pension age.

Harry Byrne

Harry Byrne

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