All individuals should have the choice to take their state pension from their early 60s at a reduced level, Aegon has argued.
Aegon’s pension director Steven Cameron made the remark after a TUC report stated one in eight people are forced to stop work before they reach pension age due to ill health or disability.
The state pension age is on an upper trajectory, and Mr Cameron believes the the number of people unable to stay in work until their state pension kicks in is likely to increase.
This could have ‘serious implications’ for people’s ability to provide for themselves in early retirement.
Mr Cameron said: “The state pension is a crucial safety net for people in retirement, with almost half of pensioners’ income coming from state benefits.
“The inflexibility of the state pension system is at odds with the government’s wider ‘pension freedom’ agenda, which allows individuals free access to private pensions from as early as age 55.
“As the state pension age continues to rise, it is important to free up state pension access to allow individuals to fit their state as well as private pension around their personal circumstances.”
The pensions director added the current landscape is a challenging one for those approaching retirement. Many people are choosing to work for as long as possible to accumulate a decent provision.
Aegon’s research showed the proportion (34 per cent) of 50 to 64-year-olds expecting to retire between 66 and 69, was more than double those who expect to retire earlier, between the ages of 61 to 64 (13 per cent).
Mr Cameron adds: “We need a permanent solution for those who simply are unable to work into their late 60s, as opposed to idly standing by as people struggle medically and financially with later life.”
