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Govt urged to scrap state pension age

The Government is facing calls to scrap the state pension age and hand savers greater flexibility over when they can access the payment.

Under current rules taxpayers are forced to wait until a specific age, set by Government, before drawing their state pension.

The state pension age for men and women will be equalised at 65 by November 2018 before rising to 66 in 2020 and 67 in 2028.

The Department for Work and Pensions has also set out plans to radically simplify the system by introducing a flat-rate, single-tier state pension worth around £144 a week for future retirees in April 2016.

Research of 2,000 UK adults carried out by PricewaterhouseCoopers reveals more than four in 10 people want greater choice over when they can start drawing their state pension.

A quarter of respondents said they would accept receiving a reduced state pension if they could retire earlier as a result.

PwC head of pensions Raj Mody says: “The current policy of gradually increasing a single state pension age focuses on overall life expectancy, but doesn’t take account of variations for different socio-economic groups and regions.

“Rather than prescribing when people can access their state pension, people should be allowed a degree of choice based on their individual circumstances.

“If the terms are set right, this approach will ultimately produce significant savings and greater sustainability of costs for the Government in the long-term – especially if life expectancy increases dramatically for some parts of the population.

“A more flexible state system completes the fundamental pensions reform George Osborne is keen to deliver and will bring pensions and retirement savings firmly into the modern age where people want flexibility, choice and control.

“We need to create a state pensions system which is fairer, more stable and sustainable in the long term. Scrapping the state pension age and replacing it with a state pension window will produce better outcomes for people, companies and the Government.”

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Great idea, like their thinking.

  2. A good idea in principle however I suspect that the minimum level of the revised BSP will always need to be at a level to keep people above means tested benefits – therefore if people draw their pension early, it would still need to be above this threshold.

    There’s obviously already the ability to defer and whilst it would also be useful to ‘bring forward’ the start date, I suspect this will only be possible if the aforementioned caveat is satisfied.

  3. @ Paul Stocks

    Good in principle, but I doubt if it would work in practice. So you are above the benefits lever at your early retirement. But what about 5, 10, 15 years down the line – once you have blown your Private Pension?

    Anyway letting people access their money early just puts more strain on overall benefits payments.

    State Pension Age should be increased to 70 without delay. Anything else just panders (as ever) to the feckless.

  4. State pensions are unfunded, i.e. paid from general taxation. Therefore, this would be a highly risky step to take, as the taxpayer would be liable for unpredictable future payments. Not something that would promote fiscal stability!

  5. Adjusting the state pension age or tinkering with any part of it should only be done when all pensioners are treated fairly and equally on retiring. The place of retirement has no business in being used to deny over half a million pensioners any future indexing on retiring. This discrimination has been in place for longer than the Queen has been on the throne. All citizens and especially those dealing with pensions and future and current pensioners should be aware of this disgraceful situation and endeavour to bring the subject up especially in the presence of Members of Parliament and the press when asked for opinions in respect of the state pension. It is theft and a private pension provider would not be permitted to do it so why should they get away with it ?.I’m sure that you have noticed in the last couple of years that this anomaly has been mentioned and so it will be until justice is done. The majority of those pensioners affected live in Commonwealth countries. Thanks for any help given towards ending this situation.

  6. Andy Robertson-Fox 29th April 2014 at 10:24 am

    Craig Douglas, your comment that State Pensions are paid from general taxation is not totally correct. While some public and civil service pensions may come into this category the State Retirement Pension is funded from NI contributions on a “pay as you go” system into the ring fenced NI Fund. The fund is currently in surplus of around GBP 18 to 20 billion and more than enough to cover the GBP580 million required for universAl uprating to be implemented.
    George Morley has outlined the discrimination being perpetrated by successive governments for at least sixty years against he frozen pensioners…who comprise some 4% of all UK State Pensioners world wide…and which if the Pension Reform Bill is enacted will, under Clause 20, affect the futures of not only the pensioners themselves but also the lives of their children and grandchildren.
    Flexibility in setting the retirement age may or may not have its benefits but, from the frozen pensioner’s viewpoint, if the playing field is not level to begin with wherein lies the value?

  7. Andy, it’s Colin. Craig Douglas was a crooner of the 50’s and 60’s.

  8. Andy Robertson-Fox 29th April 2014 at 7:47 pm

    Colin – my apologies…I must have been humming “Only Sixteen” as I typed…came from the Isle of Wight as I recall.

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