A new report from the Social Market Foundation (SMF) has revealed that more than half of younger adults back a scheme enabling them to draw down a portion of their state pension decades early, provided they accept a delayed start to their retirement payments.
The think tank’s Citizens Advance study found 54 per cent of those aged 25 to 40 viewed the proposal favourably, with a mere 6 per cent expressing opposition.
Originally championed by Labour MP Andrew Lewin, the policy would offer people between 28 and 40 a one-off payment worth a full year’s new state pension, presently £12,548, on the condition that their pension commencement is pushed back by twelve months.
To qualify under the SMF’s proposed framework, applicants would need a minimum of ten years’ National Insurance contributions, with time spent in caring roles also potentially counting towards eligibility.
A state pension proposal calls on young Britons to be handed payments early
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The report framed the proposal as a response to widening wealth gaps between generations. Over two-thirds of 18- to 40-year-olds who do not own property now consider homeownership to be “dead” as an aspiration for their age group.
Meanwhile, the so-called great wealth transfer is set to channel £5.5trillion from baby boomers to their heirs over the coming twenty years, yet only roughly a third of adults anticipate receiving any inheritance.
The reliance on family money to get onto the housing ladder was also stark: the bank of mum and dad contributed close to £10billion in 2024, with 52 per cent of first-time buyers depending on financial help from relatives to complete a purchase.
According to the SMF’s analysis, if two individuals both took up the Citizens Advance, the combined sum would nearly cover a 10 per cent deposit on a typical UK property.
Younger workers are backing the think tank’s proposal
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GETTYWhat has the impact of the state pension triple lock been on the public’s finances | OBR
Polling conducted by Opinium found that 45 per cent of those surveyed said they would be more inclined to support whichever party brought the policy into effect.
When participants were asked what they would do with the lump sum, clearing debts topped the list at 18 per cent, followed closely by housing-related expenditure at 16 per cent.
The SMF estimated that take-up among the eligible age group could range from 50 to 70 per cent, with the precise figure hinging on the final design of the scheme.
Some 51 per cent of those polled expected the state pension age to eventually reach at least 70, while 21 per cent thought it could climb as high as 75 or beyond.
Participants in focus groups voiced particular unease about the prospect of successive Governments altering the deal’s conditions or ratcheting up the pension age further still, effectively eroding the value of the trade-off.
On the fiscal side, the SMF calculated that a phased rollout beginning with a single age cohort would carry an initial price tag of approximately £1.3billion, scaling up towards £7billion annually as eligibility widened to additional groups.
Jamie Gollings, the SMF’s deputy research director, said: “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.
“The Citizens Advance changes that. It’s not a handout, it gives younger people access to capital they’ve already earned, at the moment in their lives when it can make the biggest difference.”