Allow early access to the state pension to 60 year olds with lower life expectancy says Hargreaves Lansdown

10th October 2016

Investment platform Hargreaves Lansdown has called for the state pension age review to allow early access for those with lower life expectancy

The review, by former head of the CBI Sir John Cridland reports this week. HL argues that the State pension could be paid early to those in poor health, using underwritten annuity providers to deliver better value.

The proposals include:

Tom McPhail, head of retirement policy at Hargreaves Lansdown says: “The state pension age needs to rise, in order to reflect general improvements in life expectancy across the population, because otherwise the whole scheme will eventually become unsustainably expensive.

“However we also need to accommodate those with poor life expectancy. We could vary the state pension based on gender, post code, occupation or even ethnicity but these are both arbitrary and in some cases illegal because they are discriminatory. A fairer and more efficient approach would be to use the underwriting expertise of specialist annuity providers, to target higher payouts to those individuals who have a lower life expectancy, whatever the reason for it.”

Hargreaves Lansdown’s proposal involves offering individuals the choice to take their state pension early (from age 60) as a lump sum, subject to the following conditions:

This system would work for individuals with reduced life expectancy because annuity providers could offer them a higher rate of income.

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