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.

@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.

State retirement pension is taxable, same as private pensions.

You don't pay NI on earnings or pension income once you're over state pension age. I'd been paying NI for 49 years by the time I got my state pension (51 years if you count the 2 years when I had a Saturday job!), so I think that's entirely reasonable.

No

@SofiaSoFar

Absolutely no chance whatsoever of it happening.

It's already incredibly expensive to build up any sort of worthwhile private pension. Who on earth would be thick enough to actually save for retirement if it now meant you were penalised for it?

It wouldn't be just a political disaster, it would be an economic one too.

Absolutely this. Most people who do have at least some private pension provision have a five-figure lump sum saved, which they often have struggled to build up, but which in truth will provide with nothing more than a bit of pocket money to supplement the state pension during an average-length retirement. Under a means-tested system these small amounts would just be swallowed up into the public purse to reduce its bill and just about everyone would (quite rationally) stop saving even the piddling amounts they do.

No way, penalising those who pay in the most is the absolute wrong way to go about it.

I'd support it for ludicrously rich pensioners, but realistically there are probably only a few hundred thousand of these.

Are you mad??? They’ve bloody paid in, you want that money refused to them?!
Oh and who decides who gets it? What is the threshold?
I’ve already lost child benefit, I’m bloody not losing my pension too!

This has been discussed at government level in policy around ageing for at least the last 20 years. As far as I’m aware every single piece of modelling done shows it will cost more to do than the money it would save

Of course it should be. The welfare state is a means of redistribution to support people in need - it doesn’t work if everyone takes.

It’s just young workers subsidizing a generation that designed a system to benefit themselves

Means tested in Australia and they’ve got a very effective system of private pension saving.

It’s a giant ponzu scheme that is not sustainable

@puffyisgood

I'd support it for ludicrously rich pensioners, but realistically there are probably only a few hundred thousand of these.

Which would truly be nothing but the politics of envy, and would serve only to establish the principle of means testing, which would then slowly be widened to take in many many others.

No way
I've got 43 years fully paid stamp yet won't get a bean back until 2028 🤬

I think the government could look after its elderly if it didn't have to look after the young so much.

It would make more sense to have a wealth tax. That would sort the pensioners mentioned above who have millions.
It would cost a fair bit to administer though and people can hide wealth.

How would it even work? Say I retire at 60 with my private pension, spend it all, then at 68 I technically have nothing, do I qualify then? What would be the incentive to plan?

Also, I currently pay about £400 a month in NI. If I’m not eligible for the state pension, can I stop paying in? If so, who would fund the majority of pensions?

It feels like a benefit everyone should get. I have no kids, I don’t use schools, I’d like to get something back that I’ve paid into

@AnotherSillawithanS

I think the government could look after its elderly if it didn't have to look after the young so much.

Sort of shut down the schools so they can invest more money in Ron and Betty?

It's such a difficult one as we do have to address the ageing population issue & the taxation needed to support that.

I think a wealth tax is needed & I do think free prescriptions should be scrapped.

You have to have 35 years of national insurance contributions for full state pension, that is qualification enough.

Young people who are looking at a state pension age of 68 (despite unlikely to live longer) will end up paying far more than 35 years.

Of course it should be universal.

Why should millionaires get it??
Doesn't make sense?

Brand new porche driving, huge house worth millions own outright other property etc.. Huge pensions... Massive investments.. Why?

You’d remove a lot of incentive to save. To build up a pot that would provide £10k a year for possibly 30 years would be well beyond the reach of most people. If you’d be likely to be just about the threshold then why bother saving quite frankly.

I can see the age being increased but even then many people are not capable of working into their late 60s so there is going to be a funding gap that people should already be thinking about.

The people who earn a lot throughout their lives will have paid in more, why should they get out less?

and what do you mean, that many people are living too long.
how very dare they.

We do have an ageing population though because people are living longer but there are less babies. It's quite a shift in terms of population dynamics & we need to plan for it. Acknowledging this doesn't mean you think old people need to be culled.

@Mushrooms0up

How would it even work? Say I retire at 60 with my private pension, spend it all, then at 68 I technically have nothing, do I qualify then? What would be the incentive to plan?

Also, I currently pay about £400 a month in NI. If I’m not eligible for the state pension, can I stop paying in? If so, who would fund the majority of pensions?

It feels like a benefit everyone should get. I have no kids, I don’t use schools, I’d like to get something back that I’ve paid into

Presumably we'd have to return to the system of being obliged to buy an annuity with your pension. Not that big a change, it worked for decades. And NICs (for PAYE employees certainly) are as obligatory as income tax and VAT.

@AnotherSillawithanS

I think the government could look after its elderly if it didn't have to look after the young so much.

How does that work then? Scrap maternity pay, schools and free prescriptions for the under 16s?

@80sMum, while I don't pay NI anymore I'd be happy to) I do pay tax on my private pension.

This, to me, is part of what is wrong with Sunaks plan to increase NI contributions. An income tax rise would be much fairer, in my view, it's progressive, so the more you earn, the more you pay, and it means people like me pay a share. And those who rely on state pension don't get impacted.

Also, the cost of administering a means tested benefit spirals, compared to a benefit like state pension, where there are limited changes that impact on if you receive it.

@AnotherSillawithanS

I think the government could look after its elderly if it didn't have to look after the young so much.

Agree. I don’t yet have my state pension, but I worked from the age of 16. Could argue that we have to wait an extra few years for our pensions to cover the extra years the young spend in the education system.

As has already been said, our pensions are the lowest in Europe.