Tories and Labour mooting possible means testing of State Pension

[Turmerictolly]

www.theguardian.com/politics/2025/jan/17/kemi-badenoch-pensions-triple-lock-means-test-alarm-tories

I would be so gutted if this happened but there's noise from both parties about this recently. I think it might be inevitable. What will happen to those of us nearing 60 who have made plans that include the full state pension we've paid contributions for?

There's a good chance the Leader of the Opposition will be PM in a few years time though.

Does anyone know the reasoning behind not having NI deducted from earned income when you reach retirement age? I carried on working and deferred my state pension for 2 years and was surprised when NI contributions stopped.

Why would you think occupational pensions wouldn’t be included? I mean, I thin’ it’s nonsense, Labour haven’t suggested it and Badenoch doesn’t know what she’s saying most of the time, but if it was done it would be on income, surely.
Mind you, I have a teachers’ pension, and a friend who has been in a very ordinary private sector job, similar salary, has got a pension almost twice mine…

Is there? 4 minimum. And it won’t be Badenoch by then anyway.

No one can answer your question really as there is no means testing proposal, so no detail to examine iyswim, but I can't see how public sector pensions would be excluded from any means testing. I agree that the scenario you suggest would be very unfair!

My guess is it's a historical anomaly in the legislation, but I don't know the policy background so happy to be corrected if I'm wrong! What's odd is thar whilst employee NI ceases at state pension age, employer NI is still payable in relation to employees over SPA!

I was self-employed from the age of 35, and back then I earned very well. But I also saved into a personal pension fund as soon as I went self employed. And when I sold the flat I used to live in, in London, I paid off the mortgage on the house we still live in, and put the remnants into buying a commercial shed, via a commercial mortgage, which is paid off. It's let and the rent has created a pension fund and still pays an annual income, which will supplement the SP in our retirement. It's not wealth but it's sensibly prosperous. I can shop for groceries without always buying the cheapest, and if I want a new sweater or to help DC I can, without a crisis.

But all of this knowledge I used came from a job I used to do, overseas. I worked for a pension company in the USA, and I am quite switched on to money matters. If you're not, then I fear for you.

I agree with you @Papyrophile that women need to be much more switched on to the need for a pension of their own.

Many women are going to be retiring to poverty if the plan is the state pension. If you are working, it's time to plan. We are all living a lot longer.

Without some big changes at some point the country will go bankrupt.

So many Councils counting down until they will have to declare bankruptcy- I'd costs aren't sorted out the government will eventually follow them.

Housing in some areas now costs more than an average wage and the government pay for a lot if it. Completely unsustainable.

I'm heading in the general direction of retirement and have based my finances on getting an expected pension. If I knew that I shouldn't I would have adjusted my life differently (although quite how I don't know 🙄).

I'll be extremely pissed off if it's means tested although not entirely surprised.

What evidence have you based this assumption on (that only the very rich would be affected)?

What evidence have you based this assumption on (that only the very rich would be affected)?

I suspect that it would very much be middle earners that it would hurt. They'd make the cut-off very low, as they did for the winter fuel payment, and people would find their expected incomes halved or almost halved.

It would be the usual then of effectively being worse off than those getting it from the state as they'd be barred from the additional benefits.

Which would be absolutely awful

Why should we pay for others for nothing in return. I am a person who is unable to save for private pension as for bills and taxes so even though in paper in assets I look like a millionaire I am not. Won’t be and have paid into the system every year to get the state pension. Why do not the cut the hotels bills for people arriving who never put any money in. Eventually they would get a state pension and I won’t. It is disgusting.

It's just the Tories talking about it not labour

Well perhaps you care to explain how people on their arses because of taxes and bills and salary not going up can do to save more for retirement. If anything the stupid small pension amount should be raised. If you have paid your house or live abroad in a cheaper country may be you can manage.

I agree…they (whichever government does it, if any) would have to hit middle earners otherwise it wouldn’t save enough money to make it worthwhile. Depending on the source, there around a million pensioners who pay higher rate tax. And 2.7m over 60 who pay it. But using the million, even if all state pension entitlement went at the £50k level then the saving is less than a billion, as 20% goes straight back to the treasury in income tax regardless.

So it’d have to start being withdrawn at a level quite a lot less than £50k. But, as that’s likely to disproportionately impact the civil service and NHS retirees perhaps it’ll get kicked into the long grass, and they will have accept that by getting 20%/40%/45% from those with a modicum of private pension and a state pension is enough.

If you live abroad you're outside the triple lock.

Absolutely dire to do this, don’t use the NHS, education, not entitled to anything…..pay a ridiculous amount of tax, totally understand that we need to provide for those less well off BUT wonder why I bother working full time……

Those people who are less well off who work in the supermarkets you get your food from, who maintain the roads you drive on, who work in the water companies you get your water from, who help build and maintain your house, who work in the military to protect you, who work in the police, the Fire Service etc

Maybe they should be given the chance to earn more money (and pay more tax) and richer people could earn less money - and pay less tax, but ultimately, the amount of tax the Government receives is the same.

Or would you like to live in a country without those people?

If the country you’re living in eg Spain, signed an agreement with the U.K., then you get the same rises in your state pension, but if not your pension is frozen the day you leave the UK. This is often something not researched by people who emigrate.

It’s not a race to the bottom, absolutely people should have the opportunity to earn more. Not sure how means testing a state pension will achieve that. Kindly advise.

I didn't mention means testing a pension.

Just discussing how there are other services that you do use (and pay tax towards) and how those people who the tax goes to also help you and other people in this country,

Yes, and I noted that I understand the need to pay tax for society, but there is a point where on a cost benefit analysis basis - people like me will
work less/ move abroad. There is a problem
in this country of high taxes and low income.

While I don’t consider myself to have a low income, 50 k a year is too low to slip into a higher rate tax band.

I am from a very very working class background and now earn in the top 1%, have a seven figure property and would be considered rather wealthy - but I am not sure if what I did is that possible for most people today. As tax bands have not moved in what 15/20 years….the tax burden is too high. where I live day care is 2600 a month for one child, so for two children to break even you have to earn over 100 k, and that is without mortgage/ bills etc -
and yet those people on that salary are considered not to need any help - given the 100 k cliff edge,
irrespective of the high tax burden. Scandavian countries are often cited for their benefits…child care and adult care - BUT everyone can benefit, not just lower earners.

I am totally fine with paying tax and understand why I pay it and do not begrudge paying tax, my child actually did get something on the NHS a few years ago - and we were all excited about getting something ‘free’ until we remembered that my DH served for 35 years in the British army and that between us we pay about circa 100/120 k in direct taxes (income and NI)….so when we are talking about giving back - well we have! But hey heigh - let me pay more tax a year than what most people earn, support very much the military charities (as the govn don’t look after veterans) and other charities, directly employ staff (as in cleaner/ dog walker/ nanny) - but hey, let me work a few extra years in my high stress job on top of it all for retirement, that right there is a tax on success/hard work. Politics of envy.