In the face of age changes, there is a rationale for Rishi Sunak to allow early access to state pension “bedrock.”
Following a new petition calling for the state pension age to be lowered to 63, pension specialist Aegon has stated that taking the state pension before the age of 66 would be expensive.
To be fiscally fair, any option to receive the UK state pension early would have to be accompanied with a cut in the weekly amount.
This would be the polar opposite of the current practice, which allows people to raise their state pension by postponing their claim.
“The state pension is the cornerstone of many people’s retirement income,” said Steven Cameron, Aegon’s Pensions Director. It’s also extremely expensive for the government to supply, as the current argument over the state pension triple lock has demonstrated.
“This is why, as individuals live longer, the state pension age is gradually raised to minimize additional rises in costs, which are covered by working-age people’s National Insurance contributions.”
The state pension was first adopted in 1948, when the state pension age (SPA) was 60 for women and 65 for men; however, since the 1990s, this gender gap has been eliminated, and the state pension age has been raised from 65 to 66 for both men and women.
By 2028, the state pension age will have risen to 67.
It has even been suggested that in the not-too-distant future, the state pension age would be raised to 70.
“However, the higher the state pension age, the more difficult it will be for people in demanding or manual occupations to work until state pension age,” Mr Cameron said.
“There is a case to be made for the government to look into enabling people to start receiving their state pension at a younger age, maybe 63, but at a lower rate to reflect the fact that it will be provided for a longer period of time.
“Offering early access at a discounted rate might be a huge help to tens of thousands of people. It is already conceivable to postpone accepting the state pension in exchange for a higher weekly payment.”
Mr Cameron compared the lack of choice in how to receive the state pension with private pensions, saying that giving people more control over their pension had shown to be “hugely popular.”
People have more freedom in terms of when they collect their pension, how much they take at first, and what they invest it in. “Brinkwire News in Condensed Form.”