'Universal' state pension age could be scrapped

A "one-size-fits-all" approach to the state pension with a "universal" age at which all UK workers can retire could be scrapped, says Sky News.

It's one of the options submitted to a review of pension age policy that has been put up for public consultation.

The proposal would mean "those who start work at 16 or who work in manual jobs" could get earlier access to their pension, says the BBC. Varying pension ages could also be set in different parts of the country to reflect significant disparities in life expectancy.

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To offset any additional costs, incentives could be offered to encourage more people to stay in work and pay taxes for longer, while increases in the state pension age could be accelerated for professional workers.

"Those joining the workforce today are likely to find themselves waiting until their mid-70s to get a payout," said Tom McPhail, the head of pensions research at Hargreaves Lansdown, at the launch of the review.

There have also been suggestions that people should be able to take a pension earlier but at a lower rate than if they waited to their full retirement age.

The review, which will be carried out every five years, makes no recommendations and merely asks for public input before the end of this year. It is due to report back to the government in 2017.

The consultation document gathers together research on the state pension based on changes coming in the next three decades. State pension age is currently 65 and will rise to 67 in 2028, before hitting 68 by the mid-2040s.

There are 13 million pensioners now and there will be an estimated 16.6 million by 2048. The cost of the state pension will increase from 5.5 per cent of GDP to more than seven per cent.

If immigration falls in the coming years, the relative cost of the state pension is likely to increase, as this would reduce the relative size of the working age population.

Life expectancy is 90.6 years for men born today and 93.5 for women, but regional differences are stark. Men born in Greater Manchester will live three years less than those born in Greater London, where life expectancy can vary by up to 18 years depending on where you live.