State pension: Expert slams calls to lower age to 63 – ‘Implausible’

Pension: Expert discusses state pension tax

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The UK Government intends to raise the state pension age in the coming years as life expectancy rises in the UK. The UK Government has implemented a timetable for increasing the State Pension age to 68 between 2037 and 2039. This comes as the latest projections from the Office for National Statistics show that the number of people over state pension age in the UK is expected to grow by a third to 16.9 million in 2042 – there are currently 12.4 million. The Department for Work and Pensions (DWP) also explained: “When the State Pension was introduced in 1948, a 65-year-old could expect to spend 13.5 years receiving the benefit, around 23 per cent of their adult life”.

But it is now estimated that a 65-year-old can expect to live for another 22.8 years, or 33.6 per cent of their adult life in retirement.

Despite this, there were calls for the state pension age to be lowered to 63 from 66 earlier this year.

In August, a petition calling on the state pension age to be lowered to help open up jobs for younger people was created.

It said: “Young people are struggling to find work and losing their jobs, due to the pandemic.

“Why not allow older people to retire earlier, thereby freeing up jobs for young people?

“There would be a cost, however surely a far more positive cost than paying Universal Credit?

“Not to mention the option of restoring the balance back into young people’s favour and helping restore their future.”

But former pensions minister Steve Webb has challenged the claims made in the petition, saying those calling for a lower state pension age “won’t achieve anything.”

He told Express.co.uk: “It’s just unrealistic, the calls for the pension age to be lowered won’t achieve anything.

“Yes we have had Covid, but broadly life expectancies are still going up. There’s already a plan to move the pension age to 67 within this decade and later 68.

“The idea the Government would spend billions now going backwards is just implausible, it’s not going to happen.

“Everyone would like to access their pension at 63 but even if there were those billions, wouldn’t you want NHS waiting lists down? Wouldn’t you want a decent social care system or public transport improvements?

“Even if there were those billions, it’s paying pensions to 63-year-olds who may be in still full-time work. It just doesn’t make any sense to me.

Mr Webb argued that lowering the state pension age would make the economy less productive.

He added: “If I’m 63 and carry on working, but you offer me a state pension instead and I stop working, that doesn’t help the economy. It takes my expertise and my productivity out of the economy.

“My job as a 63-year-old wouldn’t then get filled by a 21-year-old, there’s not an easy substitution there. I just don’t buy that argument at all.”

Ministers dismissed the plan and will continue on their path to moving the state pension age up.

Pension director at Aegon, Steven Cameron, also spoke to Express.co.uk in September about the state pension age.

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He explained why lowering the age would result in lower payments for savers.

Mr Cameron said: “There is a case for the 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.

“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.

“This wouldn’t be without challenges and there would need to be a way of making sure people don’t end up with an income from state and private pensions below the means-tested benefit level.”

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