Early Drawing of State Pension

House of Commons

Work and Pensions Select Committee

Committee launches new inquiry on early drawing of state pension

In its report on Communicating state pension age changes, published on 15 March 2016, the Committee called on the Government to explore the option of permitting a defined group of women who have been affected by state pension age changes to take early retirement, from a specified age, on an “actuarially neutral basis.”

This would mean some women could choose to take a state pension sooner than scheduled in return for lower weekly payments for the duration of their retirements. The “reduction factor” used should ensure that, on average, over the lifetimes of the pensioners concerned, there would be no additional pension costs to the exchequer.

The Committee requests written evidence on this possible policy. In particular, it invites answers to some or all of the following questions:

• What would be the short-term and long term fiscal impact?
• What would be the other costs of the scheme?
• Could additional costs be incorporated in the reduction factors used to achieve long-term fiscal neutrality?
• How should the scheme interact with pension credit and other benefits?
• How could uncertainty within the system be budgeted for and managed?
• How are similar schemes managed in occupational pensions?
• Who should be eligible and why?
• How popular would the scheme be among the people eligible?
• What impact would it have on the lives of the people eligible?

ABC: We will keep you posted on that one