Means testing State Pension

[CuriousMariette]

Do you think the time has come for this to be introduced? I don’t think the current system is sustainable as many people are living too long. I know it’s not fair and would be political suicide but Pensioner’s didn’t even suffer a 80% furlough during lockdowns. I say this from a place of having “paid in” as people say for 30 years plus already and would likely not receive a State Pension in this scenario.

No, pension need ring fencing & we need to pay more in. Pension needs to be a living pension & our elderly shouldn't be forced into seeking out benifits to live.

Too right. I paid NI for 47 years, that’s enough.

But equally someone younger than me may pay 50 plus years of NI contributions plus the same number of years of the additional h&s levy & still not see any state pension.

It makes the problem worse for me but I think young people who can should emigrate for a better quality of life. The burden on them is far too high now.

@TheHateIsNotGood

Anything above State Pension is 'means-tested' eg Pension Credits. I say lets really start Means-Testing, not just randomly here and there.

Pensioner Winter Fuel Allowance, Means Test.
Any Pension-aged Benefit. Means Test.
Nothing automatically given because of Age. Means Test.

Any Child-related Benefits. Means Test
Cut off £35k - no entitlement to anything above that
CTS - Means Test. Max 10% Deduction from any Award.

Shall I go on? There's loads more.....

Means testing costs more than it saves.

I know people get really shirty about idea of pensioners losing out but the government just introduced an additional 1.25% for employers & employees NI to help fund health & social care. Imagine these households

Household 1 is a single pensioner who rents a council flat with state plus small private pension. Their current income is ~ £10k/year

Household 2 is a single pensioner who owns their own 4 bed detached home outright & has savings amounting to ~£150k. Their overall pension is £40k/year but net income is more like £34.5k accounting for tax.

Household three is a single parent working 25 hours/week on minimum wage. They rent a 2 bed terrace for £600/month for themselves & 2 children. Income is ~12.5k/year but net income with universal credit/pension contributions/child benefit is around £25k

Household 4 are a couple with two children who earn around £90k between them. They own a 5 bedroom terrace with a mortgage and have ~£70k of savings. Their mortgage is £1,300/month. Their net income including child benefit less private pension contributions is ~£64k/year

If you had to pick out which two of these households ought to start paying a bit more towards health and social care which ones does it seem fairest to tax more?

Most of us are factoring the state pension into our retirement plans - so you can't really pull the rug out from under people.

I work in a job that has excellent pension provision, and I'm reasonably well paid but what with being a single parent and periods of part-time working, I still reckon I'll need the state pension to have a decent standard of living in my retirement.

Are you actually bloody serious?! Living too long? How dare you! 😡
I’m not pension age and I worked through the pandemic. How I’d have loved to have been furloughed.

@whatkatydid2013 the argument will be household 2 has been prudent & not wasted money on coffees 😆

Again - no one is promised anything at 16 or any other age. State pension are benefits- paid for by general taxation. That means generally working age people are paying for pensioners pensions. Even if ni contributions were to be invested, it would be nothing like enough to pay the average state pension.

You have to be at least a higher rate taxpayer (40%) to pay for the benefits and services you use. That’s over your lifetime- so you are paying for your schooling etc( so irrelevant if you have children or not,). What is actually happening is a few people at the top are paying a hugely disproportionate share.

I think we should just move NI into income tax so people don’t have this misconception it’s some sort of fund. It’s not, it’s just a tax. Also no reason pensioners shouldn’t pay it. Generally pensioners take most out of the system (due to healthcare needs, care and universal pensions). The wealthier ones should at least be paying in fairly.

I think we should just move NI into income tax so people don’t have this misconception it’s some sort of fund.

good point, I didn't realise so many see it as a personal pot.

@80sMum

No, it should be universal. But perhaps pensioners should continue to pay pay national insurance (or some other sort of tax). I would go further and say that everyone should be on benefits, ie that should be universal too. Means testing of benefits creates poverty traps and inequality and discourages saving and working.

We do pay tax if our income is high enough. I've been working for 52 years and my main income is my SRP and I've paid for it. I'm still working part time.

[quote mellicauli]@Fr0thandBubble My Mother is 89. She had cancer treatment earlier this year but up til then she's been very fit and healthy. It's taken 6 months but now she's in remission.

She has been contributing tax to this country for 61 years, had a fine career, raised a family and did voluntary work until 2 years ago. Yet you are saying that her point of need she should have just be left in pain and untreated?

And that you seriously think your life is worth more than hers? She developed the software for one of 1st microchips, a technology that underlies every device around your house. What exactly have you contributed?

I think it would be just be a fairer idea to ask the 4.5 million self employed people to pay the same rates of national insurance as people who are employed? I also think that working retired people should pay national insurance.[/quote]
Yes, I think a young person’s life is more important than an 89 year old’s. We can’t afford pension payments and health and social care for the elderly at projected rates without it seriously impacting what the state is able to provide for children and the young - which is where I think it should be focused.

Also means testing doesn’t cost more than it saves at all! Why else is pretty much ever other benefit means tested?

I don't know what they can do about it apart from hugely drastic measures such as DNR for anyone over a certain age

Wow, aren't you a charmer. What is this "certain age" btw? Should I start worrying because I'm 62?

My 88 year old DF had an expensive heart procedure done last year, which has given him a new lease of life, and hopefullly a few more good years on this earth. Perhaps he should just have been left to suffer and die?

@ancientgran but if you are above state pension age you don’t pay NI which is a huge saving on tax on your income compared to a younger person

What about enforced euthanasia at say??? 65???

That would fix the problem and then its fair for everyone

£2.2 b annually in unclaimed means-tested benefits for OAPs in the UK:

www.ageuk.org.uk/globalassets/age-uk/documents/reports-and-publications/reports-and-briefings/money-matters/benefit_take-up_and_older_people_may-2021.pdf

I know it's peanuts compared to friends' benefits being spaffed away by the current government, but still.

I believe some research claimed moving child benefit to being means tested would cost more in admin of more people doing tax returns, checks to ensure people hadn’t claimed when they shouldn’t have etc than it would gain. I’ve seen same on winter fuel allowance. It’s likely true for some benefits that are small & less so for those that are significant.

child benefit is means tested

I'm mid 40's I'm fortunate to have a job with a pension and afford to pay into it myself each month - I'm expecting the state pension to be means tested by the time I retire. I pay tax towards nhs funding but use private health- I'm expecting pensions to go the same way - a tax I won't personally benefit from but contribute towards.

blanket free prescriptions for over 60s needs to go

Yes Blossom I agree it does, my local Council spends more on constantly re-assessing CTS Claims than it really could. Means Test them but not me....

My suggestion of let's totally Means Test is more to provoke some brain cells into thinking; if you take Means Testing far enough beforer you know it we're all on a National Income.

Unless you've got an Uncle calle Snowball or Napoleon :).

many people are living too long.

?!?

[quote CayrolBaaaskin]@ancientgran but if you are above state pension age you don’t pay NI which is a huge saving on tax on your income compared to a younger person[/quote]
It isn't a huge saving for me because my income isn't that high. Adding together my SRP my private pension and my part time job I pay a small amount of tax, if I give up my part time job I wouldn't pay any just like a younger person who is living on that level of income.

The point is the post I was replying to was saying pensioners should be paying NI or some other sort of tax. Well we do pay tax if our income is high enough, to imply we don't pay tax is wrong.

Maybe stop the upper limit on NI so it isn't regressive. I don't suppose high earners would be happy with that.

Yes, I think a young person’s life is more important than an 89 year old’s

No it isn't. An 89 year-old has a short time left. so good luck to them,. the young have many more years before them.

I don't think we should stop treating 80 year olds or whatever but we need to increase taxation That burden should fall on everyone.