The Department for Work and Pensions (DWP) is facing a new proposal that would allow workers under the age of 40 to access a portion of their state pension decades early. A report from the Social Market Foundation (SMF) think tank suggests that young workers should be able to draw down a year's worth of their state pension up to 40 years before retirement age.
Core Proposal Details
Under the plan, anyone aged between 28 and 40 who has at least 10 years of National Insurance credits would be eligible to apply for what is called the Citizens Advance. They would receive £12,548, which is the current annual value of the full new state pension. In exchange, their state pension would begin one year later than it otherwise would.
Reasons Behind the Proposal
The SMF report highlights that 70 per cent of non-homeowning 18-40-year-olds believe property ownership is no longer achievable for their generation. Additionally, the ‘Bank of Mum and Dad’ has become one of the UK's largest sources of property finance. The think tank argues that accessing earned pension money early could help young people buy homes, pay down debt, or start families without relying on parental support.
Respondent Feedback
One 37-year-old male 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." Another added, "This comes from my own state pension, so I don't have to take on additional debt."
Expert Opinion
Jamie Gollings, Deputy Research Director at the Social Market Foundation, stated: "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. 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. Our research shows this isn't just popular across the political spectrum, it'll be transformative. We urge policymakers to seriously explore this radical and fiscally credible policy proposal. The cost of inaction is a generation locked out of homeownership, drowning in debt, and losing faith that the system can work for them at all."
Government Response
A Department for Work and Pensions spokesman said: "Unlike other savings, a state pension cannot be rebuilt once accessed ahead of time, meaning those who do so may find themselves with reduced income later in life. We want to help people reach major life milestones, such as buying a house, which is why we are boosting housing supply and addressing the cost of living head-on through initiatives such as taking money off energy bills to put more money in people’s pockets."
