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Young could get early access to state pension

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The retirement planning of those born in the late 1960s and 1970s could be affected

Early access to a state pension for those who start work at 16 or who work in manual jobs is among suggestions made to an official review.

Other submissions include extra help for carers and the chance to take a lower state pension at a younger age.

They have been highlighted in an interim government-commissioned review of the state pension age.

It said special conditions should be considered for those seriously affected by a demand to work for longer.

John Cridland, the former head of business organisation the CBI, is leading the first of regular five-year assessments of the state pension age and will present a final report to the government in 2017.

The age to which people must work before they are entitled to a state pension is already rising. Currently, the state pension age is set to be 67 for both men and women by 2028. This will rise to 68 by 2046.

The government has suggested that further rises in the state pension should reflect life expectancy, and the law requires a review during each Parliament.

Mr Cridland said that a rising pension age could have a significant impact on those with a lower life expectancy, who work in certain jobs, who started work at 16, and who care for loved ones.

“The future of the state pension age is a hugely important issue for this country. It must be fair and sustainable, and reflect changes in society,” he said.

“If any changes are to be made to state pension age, additional support may be required to mitigate the impact on the seriously affected groups discussed above and smooth their transition between work and retirement.”

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Among the suggestions submitted to the review are:

  • Early access to the state pension after a long working life – allowing those who have paid National Insurance for 50 years and started work at 16 could get their pension at 66
  • Early access to accommodate regional variations in life expectancy or to recognise certain manual jobs where people have a greater risk of dying younger. There is a gap of more than nine years between average life expectancy in different parts of the UK. Such a move would be more likely to benefit men than women.
  • Early access to a reduced pension – allowing people to retire earlier, for example at 60, and receive a lower state pension for the rest of their lives
  • Carers approaching pension age could get more help from the benefits system

The report points out that there would be extra costs to the government with all of these suggestions.

It said those born in the 1960s and 1970s should be tuned in to any changes that could affect their retirement planning.

It goes on to say that any change to the age at which people could claim their state pension must be clearly communicated to those affected.

There is considerable lobbying of the government at the moment by women born in the 1950s who say they were not given clear information about their rising pension age.

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The report has received a mixed welcome so far.

Tom Selby, senior analyst at pensions company AJ Bell, described it as “underwhelming”.

“It sets the scene without ever letting us in on what the final report might propose,” he said.

“The report acknowledges both the need for greater flexibility in the system, particularly for vulnerable people, and the value of a universal state pension age. Squaring this circle will not be easy.”

However, Caroline Abrahams, Age UK’s charity director, said: “This is a much-needed consultation to thoroughly explore all the options to help the many thousands of people who are, for whatever reason, unable to work into their late 60s.”

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