Should people be given early access to SP at a reduced rate?

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A new petition has been launched to reduce the state pension age to 63. One provider has said any option to take state pension earlier than age 66 would have to be accompanied by a reduction to make it financially fair but said flexibility might be needed as the state pension age rises.

Pensions director at provider Aegon, Steven Cameron said the current debate around the state pension triple lock has shown that the state pension is "hugely expensive", hence the gradual rise in state pension age.

“But 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 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," he argued

Cameron said with pension freedoms, many people are now controlling how much they take when. With state pensions, despite the state pension age increasing, there is no flexibility to choose to take it early.

There would need to be a mechanism to ensure pension incomes don't fall below the means-tested benefit level, he said.

"Some checks and balances might be required but with some creative thinking, this issue shouldn’t be insurmountable and would be well worth the prize if it helps people with their transition into retirement,” he added.

Should it be possible to have early access to SP at a reduced rate?
Malcolm McLean
Ian Neale