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More flexibility needed in pensions policy

The government should consider introducing a graduated state pension that would allow individuals to begin receiving part of their cash before retirement, a thinktank has recommended.

16 December 2011

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In a recent study undertaken by the International Longevity Centre, a majority of those surveyed supported the idea of such a scheme, which the ILC believes will encourage people to work for longer.?“There is strong support for graduated state pensions, and therefore the government should explore the possibility that it will lead to longer working lives,” the report said. ?“It may be possible to limit the graduated state pension to individuals in certain circumstances, that is, those in danger of leaving the labour market entirely.”?The ILC’s Gradual Retirement and Pensions Policy report asked 1,000 adults their views on pensions’ policy. Fifty-five per cent of respondents said they would support a system whereby individuals could access part of their state pension early, in return for a lower pension when they retire in full. ?Other key findings included?46 per cent of people would consider delaying their retirement if their employer offered greater support for flexible working arrangements.?36 per cent of respondents would consider delaying their retirement if the state pension age is increased further than already planned.?67 per cent of people do not support the idea that people above state pension age yet still in employment should continue to pay national insurance contributions.?

The ILC believes that the government should adopt a more flexible approach towards pensions’ planning. “It is too often assumed that retirement is a one-off event, rather than a process. Yet there is increasing evidence that we are moving towards a process of ‘gradual retirement’, a concept associated with a wide range of opportunities that may be available to older workers, including downshifting, moving into new forms of flexible work, and self-employment,” said the thinktank n

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Pensions