#AS 2014 – PwC comments on new state pension amount
December 03, 2014
Raj Mody, head of pensions consulting
The Government has announced that the new state pension will be at least £151.25 per week, with the actual amount to be confirmed this time next year.
While it's interesting to know the minimum level of the new single tier state pension, it matters more how people can access it, including whether it can match the flexibility people want and will soon have on their workplace pensions. PwC research shows that people want more choice over when they receive their state pension, even if it means cutting the amount of weekly state pension they receive.
PwC research reveals that one in four people would opt to retire earlier than a fixed state pension age, even if this means receiving a reduced amount for the life of their pension. The Government could address people's appetite for more flexibility on when they can access their state pension by dispensing with the concept of a single state pension age and instead introducing a state pension window, where people could access their state pension within a given time period.
The Government's outlined increase to state pension age means that anyone currently in their early 50s or below won't receive their state pension until they're aged 67, yet 80% of UK adults want to retire before then.
If the terms are set right, PwC's state pension window approach would ultimately produce significant savings and greater sustainability of costs for the Government in the long-term - especially if life expectancy increases dramatically for some parts of the population.