Personal Pension  

Aegon backs flexibility over state pension age increase

Aegon backs flexibility over state pension age increase

Steven Cameron, pensions director at provider Aegon, has said he supports flexibility over further increases to age of access where state pensions are concerned.

Earlier this week, Lord Adair Turner, former chairman of the FSA and Pensions Commission, has proposed raising the state pension age to 70 by 2030.

The proposal, which represents a radical acceleration of the government’s current timetable, would affect workers aged 56 and less today.

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However, Lord Turner said those working in physically demanding industries or on low incomes could be granted earlier access at a lower rate.

Speaking at a private event on Friday (20 May), Lord Turner said: “I would make the state pension more generous at 70 and, in addition, I would introduce forms of state pension or means-tested benefit, which would be available for lower-income people who’ve retired from 65 or 66 onwards.”

Responding to his comments, Mr Cameron, said Aegon supports Lord Turner’s call for creativity around how and when individuals in future can access their state pension.

However, he said as the default state pension age continues to increase, it becomes increasingly necessary to find solutions for those who are simply unable to work to advanced ages.

“The SPA is already scheduled to increase and further extending those increases without decades of notice would be extremely challenging for politicians and pensioners alike.

“The Waspi campaign is a stark reminder of the issues that can be created.

“Instead we believe everyone should be offered the option of drawing their state pension earlier than the default age but with a reduction to make this cost neutral.

“We would not propose limiting this to manual workers or those with low incomes or poor health as the challenges of working to advanced ages can exist across all employments and income levels. An arbitrary divide would also be difficult to police and be open to challenges on fairness.

Mr Cameron added these changes would go some way to extend the chancellor’s pension freedoms from private sector to state pensions.

Justin King, chartered wealth manager and chartered financial planner at Dorset-based MFP Wealth Management said: “Whereas I do understand the pension age being pushed on, as it is a natural effect of our increase longevity, increasing choice brings increasing complexity.

“How will pensioners make the right choice without advice? The financial competence of the pension claimants needs to be accounted for in designing the scheme choices.”

ruth.gillbe@ft.com