State pension age should be scrapped, Boris Johnson told: ‘Allow early access!’

The UK economy looks sent to bounce back from coronavirus, but the pandemic has sparked a debate over the state pension age, with many savers hoping to retire earlier. People currently have to wait until they are 66, but some have argued that the pandemic has created a need for more early retirement to help with the economic recovery. In August, a petition calling on the state pension age to be lowered to help open up jobs for younger people was created. It said: “Young people are struggling to find work and losing their jobs, due to the pandemic.

“Why not allow older people to retire earlier, thereby freeing up jobs for young people?

“There would be a cost, however surely a far more positive cost than paying Universal Credit?

“Not to mention the option of restoring the balance back into young people’s favour and helping restore their future.”

Pensions director at Aegon, Steve Cameron, argued in October 2020 that there should no longer be a set state pension age.

He told the Telegraph: “The longer people live, the more variation there is in health and life expectancy so there should no longer be one set state pension age.”

Baroness Ros Altmann, a former pensions minister, said that the rules making people wait until they are 66 should be scrapped, allowing savers to access their National Insurance contributions early.

She warned that some older people may not work again and branded the existing state pension system “outdated”.

She added: “Allowing early access, even at a reduced rate, could offer a lifeline to those who want to benefit from their many years of National Insurance contributions, rather than the unrealistic reliance on out-of-work benefits.

“It could help many women and many who are seriously ill or need to care for loved ones.”

Mr Cameron warned last month that reducing the state pension age could result in reduced payments, however.

He said: “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 the 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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“In the private pension space, pension freedoms have proved hugely popular in allowing people to take more control over when they start drawing their defined contribution pension and how much they take as their retirement progresses.

“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.

“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.”

The Government is set to change the age at which pensioners can access their private savings pots, moving the minimum age from 55 to 57.

The new rule will come into place in 2028 if Prime Minister Boris Johnson and his colleagues in Government follow through on the plan.

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But this has been condemned by the Association of British Insurers (ABI), who have warned the plans are “complicated”, “arbitrary” and “confusing”.

While the minimum age will be moved back two years, confusing rules mean some people will still be able to access their pension at 55 as long as the scheme they are in has this written into its rules.

This comes after the Government abandoned its triple lock pledge for the state pension last month.

Average earnings figures soared to 8.3 percent, meaning savers were set for a big rise in their pension payments.

However, the Government deemed this to be unfair, and has now changed the policy to a “double lock” for a year.

This means the state pension will now increase in line with inflation or by 2.5 percent.