Aegon calls for flexible early access to the state pension against backdrop of ever-increasing state pension age

by | Apr 22, 2022

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Responding to a call for evidence into how to set the future state pension age, Aegon is calling for a radical overhaul to introduce new flexibilities.  

With the state pension age expected to keep rising beyond the planned age 68, Aegon wants the Government to investigate offering the flexibility to start taking state pension up to three years early, at a reduced level to make it financially fair.

This would take state pensions a small step towards private pension ‘freedoms’. It would support people who in future have more flexible multi-stage lives or who are simply unable to remain in the workforce till an ever-increasing state pension age. 

 Steven Cameron, Pensions Director at Aegon said: 


“The state pension age is due to increase to 67 in 2028 and to 68 by 2039. The Government is consulting on how to set the state pension age beyond that and with increased life expectancies, it will very likely keep rising. Rather than an ever-increasing single age, we’re calling for the Government to explore offering individuals more choice over when they can start claiming.  

“The higher the state pension age, the more individuals will struggle to stay in full time work. This could be because of their health, a physically or mentally taxing job or caring responsibilities for elderly parents. An ever-rising fixed state pension age could become increasingly divisive and out of sync with today’s flexible private pensions world. 

“While individuals can already choose to defer their state pension in return for a higher monthly payment, there’s no flexibility to start it from a younger age. We support giving people the choice to draw it up to say three years earlier, at a reduced amount to make it financially fair for all.  


“Some individuals rely heavily on the state pension and opting for an earlier, reduced amount could leave their retirement income below the current threshold for means tested benefits. To understand any impact on their eligible to claim such benefits, individuals might be required to take advice or guidance from Money Helper. 

“But as automatic enrolment into workplace pensions continues to mature, millions more employees are building up an increasingly valuable workplace pension, reducing their reliance on the state pension and the risk of falling below means tested thresholds.  

“Historically, people’s lives have followed a pattern of education, paid employment and then retirement. But as people live longer, the trend may be towards a more varied multi-stage life with more varied careers and ‘breaks’ from earned employment to retrain, care for others or enjoy other life experiences.


“People already increasingly prefer to ‘transition’ into retirement, combining part time work with some modest pension income, often well beyond ‘retirement’ ages. This is another reason why it’s now time to start considering how the state pension can be made more flexible to reflect our future lives.” 

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