Would you take £12.5k now to access your state pension earlier?

[AllaMova]

The Government are apparently considering allowing people under the age of 40 to take a £12.5k lump sum in exchange for being able to access their state pension a year later. You’d need at least ten years of national insurance contributions in order to qualify, if it goes ahead.

Would you take this?

I think I would - I could stick it in a S&S ISA, in order for it to grow over time. I think it’s a pretty good idea, especially for those who are looking to buy a house.

https://www.theguardian.com/commentisfree/2026/jun/09/young-people-money-citizens-advance-generations-older-people

In my area, large stocks were sold at discount rates, which depressed all local prices in those years.

Plus social housing.

Housing is a market, there was less pressure and rents were discounted.

Were they uninhabitable slums? If you were up north 20k wasn't particularly cheap in the 80s anyway.

What has social housing and cheaper rents got to do with discounts for buying houses? Certainly nothing I heard of happening

How do you know if I do or don't own a house?

Nothing.

I think people do know houses were relatively less expensive, but they were not sold at a discount. It was the price. Now, when they brought in Right to Buy, that enabled long term council tenants to buy the council house they had lived in for several years at a discount, but this did not apply to private house sales. Furthermore, a lot of people who bought in the 80s then got stung in the 90s when interest rates went through the roof, causing mortgage rates to soar, house prices to plummet and many homes being repossessed. Yes, we all appreciate that houses are more expensive now than then, but we get fed up with misinformation such as we all bought at a discount.

National average house price in 1980 was under £25k, that includes London, north would be lower.
Prices rose through the decade, but were not much increased in the early 80s.

They were glory days when you could buy three story house in central London on a teacher’s wage. Nothing to do with government schemes just the ratio between wages and house costs.

MIRAS was a good deal. You got tax relief on the interest up to 30k. If 2 unmarried people bought together, you could claim 30k each. Thatcher decided that was encouraging people to live in sin and announced that double MIRAS would end. That led to a scramble to buy property before the deadline. Thus creating a bubble, which then burst.

I would definitely consider it. We are in our mid 40s. We both have decent pensions, office jobs, and will hopefully be able to retire a little bit earlier than state pension age - once the mortgage is paid, and will likely keep working in very PT roles at that point.

we own our house but have a decent size mortgage and some debt, plus the house needs quite a bit of work done. We get by fine, but we don’t have any savings and currently unable to accumulate any without major lifestyle change.

Id probably take the money, pay off debts which would then free up money on a monthly basis. If required we could then channel some of that money into our pensions.

Why are people against this?
You would be daft not to take it.

Retire at 67 and get 12.5k until 68 and continue with 12.5k a year
OR
Take the money, lock it away until you are 67 (you weren't gonna get it till 67 anyway), Retire at 67 get the 12.5k plus interest back out (30k+) then back on to 12.5k at 68.

Totally. The biggest problem with this 'perk' is that it will create greater demand for homes and force house prices ever higher, creating more problems for the even younger folks further donw the line. The only way to fix that is by building.

The home owning pensioners will be fine.

I totally agree it's a short term fix to a long term problem

Sounds like a really poor financial decision

I'm sure some people would go for it

12.5 k isn't much

Ditto

I would as I have a good DB pension.

Sitting with the government for 25 years at 0% interest=12.5k
Taking now and leave sitting in an ISA for 25 years at 5% interest = 42.329k

In what way is that a poor financial decision?

Yep that’s what I would do. I would take it

The £12.5k now won't be £12.5k in 25 years' time, it'll get adjusted for inflation.
But the comparison may still favour taking it out.

Nah. I’m good. My pension age is already 68…

Yes this the worry, what if you're exhausted!

I think it says up to 40yrs old so far too late for me. But I would totally encourage my teens to take it and put in a pension or ISA. You’d be mad not to. The compound interest from 18 -67, over 49yrs, would be way way more than a single years pension you would be sacrificing. Of course the people that took it and spent it would be in trouble - and I can’t see how you’d police what people did with it without the administration costing loads but maybe it would be possible.

I would. I’m lucky enough to already own my house (with a mortgage) and I’d use the funds to invest into a s&s isa or other similar product worth the view to repaying a sum off my mortgage sooner. I think state pension age will be very high by the time I can retire anyway so I’d rather take something now

What discount was that?

I would as I've got quite a good work pension but I could do with the money now. However I'm too old 😣

I'm 51 - I would take it & invest it however I have no intention of working until state pension age so receiving it a year later won't make any difference. I already have investments & pensions as a result of being widowed very young.
My concern would be those people that took it & were not responsible with it who then expected state support through other means for that extended timeframe & how that would be managed.
There will also be those who look to take the early payment for tax reasons as it would avoid an increase in their annual income for a year.
Edited to add - if it's age 40 I wouldn't be eligible anyway

Absolutely and I would immediately stick it in my shares ISA