A state pension proposal could see millions of younger Britons get an early payment worth up to £12,500, but who would be eligible for this major change?
A think tank has put forward an idea that would enable younger adults to access a substantial cash payment now by agreeing to postpone their state pension entitlement.
The Social Market Foundation’s Citizens Advance scheme, originally conceived by Labour MP Andrew Lewin, would offer £12,548 to eligible individuals.
This is the equivalent to the current full annual state pension value and would be an option for those between 28 and 40 years old with a minimum of ten years’ National Insurance contributions.
Could you get your state pension early?
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In exchange, recipients would see their state pension commence twelve months later than scheduled. Time spent as a carer for children or family members would also count towards eligibility under the contribution-based criteria.
Polling conducted by Opinium reveals that 54 per cent of those aged 25 to 40 view the proposal favourably, compared with just 6% who oppose it.
This backing spans supporters of different political parties. Between half and seven in ten respondents indicated they would personally take up the offer, depending on the scheme’s specific terms.
One survey respondent said: “It feels empowering and will help me with a big life purchase as I don’t have the support of parents or family members.”
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Another respondent noted: “This comes from my own state pension, so I don’t have to take on additional debt.”
Nearly half of young adults surveyed said the Citizens Advance would make them more inclined to support whichever party introduced it.
Clearing debts emerged as the primary intended use for the money, selected by 18 per cent of those surveyed. Property purchases ranked second at 16 per cent.
More than seven in ten non-homeowners aged 18 to 40 consider property ownership effectively “dead” for their age group. Meanwhile, family wealth increasingly determines who can get onto the housing ladder.
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Last year, 52 per cent of first-time buyers received financial assistance from relatives, with the average contribution reaching £55,572. The so-called Bank of Mum and Dad has become one of Britain’s largest sources of property finance.
The scheme would cost between £3billion and £7billion annually once fully operational, though phased introduction could keep first-year expenditure below £1bn.
Jamie Gollings, the deputy research Director at the SMF, said: “Britain is facing a crisis of opportunity.
“Whether you can buy a home, pay down debt, or start a family increasingly depends on the wealth of the parents you were born to not the work you’ve put in.”