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?

For example, the Tories making child benefit means assessed rather than universal has led to it being somewhat stigmatised, and this could be the same for state pensions.

Is it stigmatised? I know this is a bit off topic but I really don't think it is. If neither parent is earning over £80k, they get full child benefit. I disagree there's a stigma on those families.

Please don't say that Miley about there being nothing left, I'm a similar age to you

This, this in spades

Surely means testing the state pension would be a bureaucratic nightmare? I can't see how they could introduce a system that would be fair to everyone (not that it's stopped Government's in the past e.g. Osborne's 2011 pension act - enacted when I was 59 years of age, so very short notice). If nothing else, I think the robust WASPI campaign will give everyone else a long lead-in before any pension act changes - so the younger generations can thank us for that!!!!

Someone previously on this thread said we are a high tax country and quoted £2.500 average council tax, and this is true. Don't work or save - get pension, pension credit, free glasses, free dentistry, winter fuel allowance, council tax paid and rent paid. In addition free residential care, which is in effect subsidised by those residents who pay privately. Be responsible and you're paying income tax and council tax, so in effect the derided 'boomers' are essentially also funding public services like younger working people.

I wouldn't change my situation though, my own income, savings and owning my own house give me autonomy and independence. I have already given my younger family house deposits and lump sums - it's called financial planning. I picked up this via my parents and also my career. But no prudent planning can counteract the Government suddenly deciding they'll change the goalposts re pensions. We shall see - Starmer has already done some pretty random things I never thought I'd see a labour government do. Yes, we're in a pretty dire state - but it only seems to apply to our own people - he's quite happy dishing out large sums abroad. Charity begins at home.

I agree, it has not become stigmatized! In fact the only thing I can think of that would possibly count is where a relatively high earner dares to pay a bit extra into their pension to retain eligibility for child benefit. It always leads to shrieking on here (mostly from people who claim UC thenselves and presumablysee nothing wrong in managing one's working hours to maximize their UC take...)

It’s a social contract, those saying “you haven’t paid in” yes we have, our contributions are paying for the current state pensions on the understanding with the government that the generation below pay ours. If there are going to be radical changes to the state pension it would have to be for people entering the workforce not people who are leaving it.

I agree that it would need to be introduced decades in advance so people put more into a private pension. But you can't avoid a situation where people who won't get a state pension themselves will spend their working lives paying for the universal state pensions of those older than them.

I think that unfortunately it won't be introduced decades in advance. Politics is too short-sighted - any party that introduced this would be severely hampering their election chances for years and years. So you might actually get to a situation where every government pushes the problem down the road a bit until there's a crisis of pension funding and changes end up needing to be made with a much more immediate effect. Which would be far more damaging because people won't have been able to plan.

BUT my pension payments are MINE. It's something I pay for that I expect to get back. I am more than happy that my taxes help others but when it comes to my pension, I think it should be protected. I don't want my pension payments to be given to someone that my taxes have already supported their whole life.

That’s not how pensions works though. You don’t have a pension in a pot with your name on, you are paying for those above you. The issue is the changing demographics, it was sustainable when we had a pyramid now we have more over 65s than under 15s it’s not.

If there are going to be radical changes to the state pension it would have to be for people entering the workforce not people who are leaving it.

In an ideal world but we don’t have the money now.

Is it stigmatised?

Does that poster mean how CB is thrown in peoples faces by some as in they are having help to pay for their dc? It does involve ignoring the fact that it used to be universal & previously people had a lot more dc.

It's never been sustainable- the first recipients of the state pension hadn't paid a single penny towards it.

BUT my pension payments are MINE. It's something I pay for that I expect to get back. I am more than happy that my taxes help others but when it comes to my pension, I think it should be protected. I don't want my pension payments to be given to someone that my taxes have already supported their whole life.

But the taxes paid by the vast, vast majority of people are not enough to fund that person's own state pension. They're certainly not doing that AND helping others as PP seems to be suggesting. Most people are already net recipients from the state by the time they reach state pension age...

It terms of moving the pensions system to a more sustainable model, I would:

• combine NI with income tax, to remove the notion of ‘paying in’, which is disingenuous (NI is just a tax),
• means test the state pension, and
• move public sector pensions to a funded, defined contribution model.

These changes clearly couldn’t be implemented quickly, but rather start the groundwork now to take effect in, say, 20 years - if done too quickly then it would clearly fuck a lot of people over.

It’d also be greatly unpopular and political suicide, so instead successive governments will just kick the can down the road.

combine NI with income tax, to remove the notion of ‘paying in’, which is disingenuous (NI is just a tax)

This 100%. Trouble is, even if they reconfigured it so that no one paid more tax overall from the date of the change, it would still involve increasing the marginal income tax rates massively, so people would be up in arms.

Most people are already net recipients from the state by the time they reach state pension age...

Yes, state pension is 11.5k a yr ish so 230k for 20 yrs so you would need to earn 50k plus for 20 years just to have paid enough tax for that pension. But what about the NHS, your education etc & most people don’t even earn that for that long.

The problem is that most middle aged people have much smaller private pensions than those who are retired already.

My employer pays 18% and I pay 8%. Started this job at age 35 and no pension from before that as was before auto enrollment and I was in the private sector in a not very well paid job. I have savings but that's for a house deposit. My predicted private pension if I carry on paying the same and work till 67 is 11k. I am relying on the state pension of 11k to make it a reasonable income of 22k. It's hardly riches. I am exactly the kind of person that would be considered well off enough to not get SP any more. (If a similar cut off applies as the WFP).

I have another 22 years to go before retirement. Not enough to double the amount especially as I'm a single parent with 2 young children so can't work extra hours. Lots of people will be in a similar or worse position - private pension of a few thousand annually that is not enough to live on but added to the SP makes it reasonable.

At least they have tried though

People who have other pensions or income pay income tax on the state pension. At the moment people can buy extra years - if the means test went ahead I think people who lost the pension would feel justifiably unhappy, there is a question of fairness and it would seem unfair. Sadly given the waspi women I think government might make it means tested.

Doesn’t it depended what you mean by
means testing, pensioners pay tax via PAYE or self assessment so wouldn’t it be easy and cheap for the government to say if your earning average £x over the last 3 tax years you either don’t qualify for state pension or get a reduced amount?

This was the justification for capping child benefit at £50k, it was an easy and therefore cheap way to do it.

Don’t disagree. Whilst it seems to be acceptable to assume that anyone with any money has somehow had it fall from the sky, it makes people very uncomfortable to discuss fraudulent benefit claims. Which is absolutely happening and need to be addressed. There are many, many people who know how to game the system and many more who seem to think their financial situation is somehow someone else’s responsibility.
However, we also need to address why companies aren’t paying enough for people to live, why two working adults with 2 children need financial support and the enormous, enormous inefficiencies in the public sector. People with disabilities are not getting enough support, the very “safety net” designed for them is failing, the treatment of children leaving care is a disgrace, people are dying in hospital corridors.
If I stopped working today, I would never, ever be able to claim back in benefit a fraction of what I’ve paid, so I’m doing my bit to contribute but it will never be enough until the system has a complete overhaul.
Like many in my situation, I’m contemplating a move out of the UK. Why wouldn’t I? For people in my situation it is all one way so if I can move somewhere warm with a decent standard of living and protect my relatives from horrendous amount of inheritance tax and finally pay a bit less tax myself? I will.

However, we also need to address why companies aren’t paying enough for people to live, why two working adults with 2 children need financial support and the enormous, enormous inefficiencies in the public sector.

A huge issue is the cost of housing & the intergenerational inequality around it & wage stagnation.

I don't see what your point is then. If he's not wealthy enough not to need it, then he would be entitled to it under means testing.

Does the fact that you can't access the adult social care or disability support that you need because there is no money not demonstrate to you the need to stop paying huge sums of money to wealthy old people??

This will absolutely happen. They are preparing the public for it by starting to make noises now. Only those who never worked at all in all their lives or earned very little will get a pension in the future - basically freebies for those who have lived off the taxpayer for life - why change a habit of a lifetime.

This disaster is unfolding before our very own eyes. Less than half the people in this country are net contributors, the minority are paying for the majority to live. We have millions who are too sad, apparently, to work so they need to sit at home and be given a paycheque by the taxpayer.

On top of that we are importing a million low skilled migrants who are net takers from the system. Many don’t earn enough to sustain their own use of public services, let alone their non working spouses, multiple kids and elderly parents they bring with them. What happens when these net takers migrants also each pension age, not only will they and their families have been receiving taxpayer funded support for years, they will then be given a pension. And so the Ponzi scheme will continue.

Our GDP per capita per shrinking because we have the same amount of cash to go around to pay for an increasing and unproductive population. So guess what, you have to take from those who have to give to those who want it for nothing. Socialism in a nutshell.

This country is doomed. Anyone who is a net contributor should take their tax dollars and get out while they can.

I also think this thread is an interesting example of why it’s so difficult to reform the welfare system in this country.

Any government/opposition party who said they were going to make the changes that lots of people know are needed (be that pensions or the NHS, changes that are necessary due to people living longer and having much higher care home costs, healthcare costs, claiming pension for longer, these are demographic shifts not political ones) would lose the next election. So politicians of all parties perpetuate the myth that things can continue as they are when they know this isn’t true.

I think we have to take some responsibility for that as voters though rather than blame the politicians. They need to say these things or they won’t get elected. People demand easy answers to these very complex problems such as “tax the rich” (they do, the wealthiest pay more tax now than they did in 2010, absolute fact, under a Conservative government).

I would love an honest conversation about the welfare state in this country, what needs to change and what’s affordable. But it can’t happen and some of the responses on here show why.

But that’s the point, as it stands you’re getting back far more than you paid in.

Would people be happy to just get back what they put in, plus interest? If the government said “We can’t afford State Pensions anymore, but we’ll give you all your money back that you paid in” would that be fair?

@DGR10

Great post totally agree. This thread is making me think that I need to stop paying into my private pension immediately and start looking ahead into potentially leaving the UK. You can guarantee that the people who will be clobbered by this are the middle/moderate earners. I agree that young peope are entitled to feel resentment due to intergenerational inequality but you can't ask taxpayers in their 40's/50's/60's who have and continue to fund currrent pensioners to have the rug pulled from under them and be happy about that. Longevity is proving to be disastrous, we are all living too long, over-medicating the elderly and prolonging life for the sake of it.

& as for the poster further up thread who claims that someone living a lifetime on benefits is never better off than a worker, what tosh! Do you know what 50 years of work does to a person? Not just the time poverty but the physical and mental strain? The stress? Do people on beneftis never have holidays? Time for hobbies? Relaxing on the sofa? Having a nice lie in instead of hauling ass out of bed on freezing dark January mornings? My daughter struggled with terrible anxiety, still does, diagnosed with PTSD and guess what, she WORKS.