Is it time for a flexible state pension age?

State Pension Inequality campaign drawing attention to the thousands of women, born in the 1950s, who claim they were not given fair warning of the rise in their state pension age from 60 to 65.

At the moment you can take your private pension at 55 but must wait until you reach state pension age for those payments.

Under current plans, the state pension age will be 68 by 2044, in line with people spending a third of their adult lives in retirement.

Injecting more flexibility into the system has its supporters.

In a report entitled One Size Fits None, accountants PwC suggested a state pension window from 65 to 75, allowing individuals choice of when to take their pension It maintained this would be “fairer, more stable and more sustainable in the long term”.

Recent TUC research found an enormous drop in participation in the labour market from well before state pension age. Barely half of 60-64 year-olds are economically active.

It highlighted nearly half a million people within five years of state pension age who are too ill or disabled to work. Up to a third of older people from manual occupations who are economically inactive ahead of retirement cite sickness or disability as the reason, twice the rate of those in some white collar categories.

The Labour Party has picked up on this, proposing a different state pension age depending on an individual’s job.

Steven Cameron, director of pensions at Aegon, has also called for early access of the state pension at a reduced level if savers choose to take it early. “With state pension age scheduled to keep increasing, we need a permanent solution for those who simply are unable to work into their late 60s because of job demands or health concerns.”

Indeed, a flexible retirement age was originally floated ahead of the publication of former CBI chief John Cridland’s recent governmentbacked review into the future of the state pension. Yet ultimately he turned his back on the concept having concluded it would be “horrendously complicated” to implement. A single state pension age was “simple and clear and provides a trigger for pension planning”, he insisted.

His only concessions to the flexibility lobby were a proposed mid-life MOT to help people plan their later lives through “addressing their lifestyle, their skills, paid and unpaid work, and their retirement income”. Meanwhile, some vulnerable people in their 60s should have access to a means-tested benefit, along the lines of pension credit.

But no “early access” to the state pension, and that broadly seems the Government’s position, preferring to keep moving the state pension age back as people live longer.

Ros Altmann, former pensions minister, said she was disappointed with Cridland. “The system makes no allowance for differential life expectancies across the regions of the UK and no allowance for different industrial occupational work experience.” The debate continues. Trevor Law is managing director of Eastcote Wealth Management, chartered financial planners,

based in Solihull. Email: tilaw@eastcotewealth.co.uk