Firms call for state pension flexibility

The government should consider making state pension withdrawals more flexible, Aegon and Aviva have said.

Aviva has suggested allowing people to access part of their state pension, rather than in full, from state pension age.

It proposed that the unclaimed amount would then increase in line with traditionally deferred state pensions.

The firm argued that a more flexible approach would also benefit businesses by allowing their employees to work for longer.

Aegon urged the government to consider allowing people to access their state pension early at a reduced amount to suit workers that may need the flexibility.

However, Aviva warned that the increased flexibility would create a greater need for advice and called for savers to have easier access to regulated financial advice.

Commenting, Aviva UK Savings and Retirement CEO, Lindsey Rix, said: “There are several actions the government and employers could consider to better support workers in the 45+ 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.”

Aegon pensions director, Steven Cameron, added: “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.

“We would like the government to explore allowing people to take their state pension from an earlier age, perhaps 63, at a reduced amount to reflect the fact it is starting earlier and will be paid for longer.

“The older the state pension is, the more difficult it will be for those in stressful or manual occupations to keep working until state pension age. Offering early access at a reduced level could be a big help to many thousands.”

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