The UK Government should scrap the state pension age and should replace it with a state pension window, PricewaterhouseCooper (PwC) has urged.

According to research by PwC in its report One Size Fits None, four in ten of the 2,000 people surveyed want choice over when they can access their state pension, even if it means cutting the amount of weekly pensions they receive.

The current state pension system has been described as "rigid", but PwC said that providing more flexibility in this area would match the reforms to workplace pensions, following the Government's announcement in the Budget that it will no longer require people to buy an annuity at retirement.

Raj Mody, PwC head of pensions, said: "It is clear a one size fits all state pension age does not work anymore. A more flexible state pension system will place retirement decisions firmly back in the hands of workers and companies.

"The current policy of gradually increasing a single state pension age focuses on overall life expectancy, but doesn't take account of variations for different socio-economic groups and regions.

"Rather than prescribing when people can access their state pension, people should be allowed a degree of choice based on their individual circumstances. If the terms are set right, this approach will 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."

PwC said that the state pension window option would allow people to choose when they receive their state pension between a range of ages, and receive an adjusted amount for the life of their pension based on their chosen start date.

The firm's research revealed that 47% of the people who want to receive their state pension earlier would be prepared to take a cut of more than £450 a year for the life of their state pension, for being able to take it one year earlier.

As well as providing flexibility, the state window option will introduce more fairness between socio-economic groups, which should ultimately produce significant savings and make the cost of providing a state pension more sustainable in the long-term, PwC said.

Jon Andrews, PwC head of HR consulting, said: "A state pension window gives people and companies much more control in their retirement planning and removes any nasty surprises. This flexibility also means people can take their state pension later, allowing people with key skills to stay in the workforce for longer."

First published 29.04.2014

monique_simpson@wilmington.co.uk