Personal Pension  

Webb warns about early state pension access

Webb warns about early state pension access

Responding to the work and pensions committee’s call for views on allowing certain women to draw their state pension early, Royal London’s Steve Webb has warned this would be of little or no benefit to those most affected by increasing state pension ages.

Under the proposal, some women born during the 1950s who are facing sharply increased state pension ages would be allowed to draw a state pension earlier than planned, albeit at a reduced rate.

In its response, the provider pointed out such a scheme could not practically be implemented until April 2018 at the earliest.

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For example, all of the women in the much-discussed group born between April 1951 and April 1953 would already be drawing a state pension and so the option of ‘early access’ would be of no value to them.

There is also a question as to whether it was compatible with equalities legislation.

Mr Webb, director of policy at Royal London, said the select committee should be commended for looking at creative solutions to the problems faced by women who have seen large increases in their state pension age, but that early access was likely to be of very limited benefit.

He said: “By the time the government had passed the necessary legislation, reprogrammed its computers and communicated the new option, most of the women would already have begun drawing a pension or be close to pension age.”

Adviser view

Paul Lindfield, director at Manchester-based Sedulo Wealth Management, said: “There are no cast-iron guarantees with state pensions; it is something that in every government and change of Parliament they fiddle with. I don’t believe the triple lock and new state pension have got any legs.”

ruth.gillbe@ft.com