Aegon has put forward a proposal that would allow individuals to access their Department for Work and Pensions (DWP) state pension up to three years earlier than the current retirement age. The plan, which also covers private pensions, aims to provide greater flexibility for savers as the state pension age continues to rise.
State Pension Age Changes
The gradual increase in the state pension age began in April 2026, moving from 66 to 67 by April 2028. In parallel, the minimum age for accessing private pensions will also rise from 55 to 57 in April 2028. These changes have prompted Aegon to call for an early access system that would allow people to claim their state pension before reaching the new age thresholds.
Under the proposed system, savers could choose to draw their state pension up to three years early, but at a reduced weekly rate. This would provide a financial bridge for those who cannot work until the higher retirement ages due to health issues, caring responsibilities, or physically demanding jobs.
Aegon's Call for Flexibility
Kate Smith, head of pensions at Aegon, explained: "We need a system that offers realistic choices, that better reflects people's lives, not a cliff-edge. An early access system could provide a vital financial bridge. Savers could choose to draw their state pension up to three years early at a reduced weekly rate."
Smith emphasized that this flexibility should be available to everyone, but it is specifically designed to support manual labourers, carers, and those battling ill health who cannot physically work until 67 or 68. She warned that without such measures, these groups risk being pushed into poverty.
Risks and Responsibilities
Smith cautioned: "Taking a reduced state pension risks dragging people into poverty, meaning the UK Government must be prepared to think outside the box." She also stressed that employers must step up by collaborating to design flexible roles, phased retirements, and age-inclusive workplaces. Higher workplace private pension contributions could allow older workers to transition with dignity, rather than out of financial desperation.
The proposal comes amid speculation that the state pension age could rise to 68 earlier than planned. Smith said: "Rumours persist that the shift to age 68 will be brought forward to the late 2030s. Accelerating this timeline is an incredibly bad idea that will unfairly shock the system and hit the most vulnerable hardest."
Impact on Wealthy and Vulnerable
Smith also highlighted an inequality in the current system: "It should be recognised that increasing the state pension age benefits the wealthiest most as they tend to live longer, not those necessarily in the most need." This suggests that any further increases could widen the gap between the rich and the poor.
The proposal is now open for discussion, with Aegon urging the government to consider the implications for all savers. The plan could offer a lifeline to those who are unable to work until the current retirement ages, but it also carries risks of long-term financial insecurity for those who opt for reduced payments.
