Calls for flexibility on claims for state pension

A THIRD of over-45s believe they may not have enough money to retire when they choose, a survey of employees has found.

Some 32 per cent of mid-life employees feel this way, according to Aviva’s survey of more than 2,000 people in this age group. The insurance giant is calling for more flexible state pension withdrawals.

It argued that people should be able to claim some of their state pension from state pension age if they want to and defer the rest so that the untouched amount rolls up.

At present, people do have the choice of being able to defer their whole state pension if they want to and claim it at a later date, which could increase the payments they receive when they do want to claim it.

Aviva’s proposal would allow people to claim a slice of their state pension, which could top up money earned from part-time work as people heading towards retirement cut down their hours. The unclaimed portion would increase in line with traditionally deferred state pensions.

The default retirement age was abolished in 2011, stopping employers from compulsorily retiring workers at 65.

Aviva said nearly half of UK employees aged 45-plus are already considering working for longer or are already working beyond the state pension age. It said the median average age of the UK population has risen from around 34 to 41 over the past 40 years, a trend reflected in the UK workforce.

There are now more than 10 million people over the age of 50 in work – a record high.

Lindsey Rix, of Aviva, said: “There are several actions the Government and employers could consider to better support workers in the 45-plus age group. We believe the choice between claiming 0 per cent or 100 per cent of the state pension no longer reflects our increasingly flexible working lives and we are calling on the Government to allow individuals to make flexible withdrawals from their state pension when they reach their state pension age.”

Ros Altmann, a former Pensions Minister, has been calling for flexibility around the starting age for the state pension, to recognise differences in circumstances.