A pensions expert calling for a state pension age at 63 with a reduced payments rate has explained why the system could be a good compromise.
Steven Cameron, pensions director at Aegon, previously put forward the idea of a early access to the state pension by three years, which would mean a potential state pension age of 63 as the current state pension age is 66 for both men and women.
He said such a system could work as it would suit two groups of people. He told Express.co.uk: “There will be some people out there who will be saying, I absolutely want the triple lock to continue to ratchet up the level of my state pension and I’m prepared to wait longer to get it.
“I’m prepared to accept that that might mean that the state pension age increases faster in future.
“There will be other people out there saying, I just want to get my state pension at the current age and I don’t want to have to wait longer, and I’m prepared to accept that maybe the triple lock can’t continue to grant as generous an increase in future.
“So I think there’s two groups of people. Some who’d prefer the state pension age to be fixed and the triple lock to be less generous, and others who want the triple lock to continue as it stands and will be prepared to wait a bit longer.
“This idea we’ve been talking about, if the state pension age keeps going up, allowing you to take it a little earlier, I think that gives people the choice and meets the needs of both those groups.”
He said the proposal would allow individuals to decide on this trade-off according to their current needs.
Mr Cameron also said the current large increases delivered by the triple lock risk making the policy unsustainable. He commented: “The triple lock is increasing the level of the state pension and in some years, by quite a generous amount.
“That’s increasing the cost so that means that it’s less affordable going forward. That’s one of the reasons the state pension age might have to go higher in future.”
Legislation is currently in place for the state pension age to increase gradually to 67 between 2026 and 2028, and then from 67 to 68 betwwen 2044 and 2046.
The Government published a review into the state pension age last year with ministers considering bringing forward the plans to increase it to 68.
A decision on whether to change the timetable for the increases will be made within two years of the next Parliament.
In line with the triple lock, state pension payments increased 8.5 percent this month, after a 10.1 percent increase last year.
The full basic state pension is now £169.50 a week while the full new state pension is £203.85 a week.
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