I’ve easily found £30bn of savings, so why can’t the government do this?

[OwnGravityField]

How about this state pension adjustment proposal?

Currently, the state pension system pays the same to everyone, even to households with very large private pensions and investment incomes. Much of this money ends up funding luxuries.

The proposal is simple:
*full SP for everyone who depends on it (60% of pensioners)
*households with more than £12,000 a year from private pensions, work, or investments have 50p of SP withdrawn for every £1 above that level, up to the value of the pension itself
*A quarter of pensioners would only have a modest reduction, and only the wealthiest 15% would no longer receive a publicly funded pension they do not need.

I used chatGPT to do the calculations.

Savings? THIRTY BILLION A YEAR

That’s 1% of GDP

List of things that could improve?

restored trust between generations so young taxpayers see their money spent on genuine need, not luxury.

national renewal: homes, NHS, lower childcare costs, investment in schools, training, the police force. It could be used to help families who are struggling with mortgage costs.

re-directing spending from low-value consumption (luxuries, imports) to investment (homes, healthcare, infrastructure) improves living standards

Positive effect on the bond markets, sterling value, credit-rating agencies, inflation trends, reduction in government debt - the UK really really needs this right now

I’d absolutely get up off my bum and vote for a party that proposed this. Would you?

Now go and sell that to the electorate

Exactly how many pensioners do you think would vote for it? It's electoral suicide. There is also massive potential for a legal challenge.

Because all those people who have paid in to work pensions have also paid tax and NI. Why should their state pension be reduced because they’ve been sensible and paid in to employer pensions?

Pensioners vote more than young people so parties don’t suggest policies which will upset them.

i suspect many people would feel ‘what’s the point in saving in to a private pension if it means I don’t get my full state pension’. Might as well not put in to a pension, unlsss you know you’ll be one of the ones with a huge pension. Much like some people on universal credit may not be motivated to take on additional hours as once transport/childcare costs are accounted for and their UC is reduced for the additional earnings, they’re no better off.

Not saying I disagree with the idea in principle, but I don’t think it’s as simple as you make out.

Currently I’m working towards retirement
picking up extra shifts and cutting back to increase my pension

so my question is why should I bother working more making cutbacks too boost my private pension
where I’ll end up no better off I might as well stop picking up overtime and spend a bit more on my holiday

I ran the calcs on chatgpt about public sentiment:

Whether people would back this reform depends on how it is framed, who explains it, and when it is introduced. Yet the evidence suggests that, if presented clearly and fairly, a majority of voters would support it.

Around thirteen million people currently receive the State Pension which is about one in four voters. The remaining three-quarters are working-age, and many of them feel that the system no longer reflects today’s realities. Research by YouGov and Ipsos shows:

• 60–70% of under-50s believe the triple lock and universal pension payments are unsustainable.
• Around 40% of pensioners agree that wealthier retirees should receive less.
• Roughly two-thirds of all voters support the principle that people with large private pensions should get a reduced State Pension.

So, it looks like it would actually be a vote winner at election.

How much does your scheme cost to administer in terms of working out who has how much in private pension?
This is the usual argument - and it's a good one - for not making benefits means tested.

Is your plan in addition to the income tax they already pay on their pensions?
Remember the State Pension is currently subject to income tax. It's just that currently the state pension is below the personal allowance (), so if anyone has an additional private pension, thus is subject to income tax at the usual rates (tax codes are adjusted to take the state pension into account).
So your proposal is for every retired person to have an additional 50 percent tax?
() this may change if personal allowances remain the same and the state pension goes up.

Well if they introduced that, id stop contributing the chunk of my wage every month that goes towards my pension and just get state pension- it would give me a better quality of life now.

No idea why some words are on italics

I agree. That’s usually the line that’s trotted out. Again, I plugged in that query: It shouldn’t cost anything extra since the government is already working on joined up infrastructure (e.g linking DWP info to HMRC).

No thanks for me personally. But then I am within a decade of state retirement age and paid into the state scheme since I was a teenager. What would be your timeline for implementation? Eg anyone under 30 as they have nearly 40 years to make alternative plans?

You are aware that Chat GPT makes things up?

Have you factored in the cost of means-testing the UK's 13 million pensioners? Means-tested benefits are much more expensive to run than universal ones, and there are several hundred thousand people joining and leaving the scheme each year.

Why stop at pensions. If you’re means testing old people why not millionaires who claim free childcare places as well?

Setup (IT + communications)
£1.5–£2 billion (one-off)
Similar to Universal Credit rollout, but simpler
Annual running cost
£0.5–£0.7 billion
~3% of £30 billion savings
Net fiscal gain
~£29 billion per year
After admin costs
Feasibility
High
DWP and HMRC already share most required data

It looks like the ‘admin costs’ thing won’t wash this time

But pensioners are more likely to vote than younger people.

There is no way any political party would propose this for the short-term, the period in which they need to find the £30bn.

And don't forget, wealthier pensioners pay tax too. I'll be paying 40% on all of my state pension and we've budgeted our retirement on that basis as self-employed DH doesn't have much of a pension.

You do know that CHATGPT isn’t always right don’t you?

Erm. No.

NI contributions now pay for current budget so very risky for current income if a lot of people simply stop contributing.

Fair to use chatGPT to run some numbers and play with ideas - I hope the government are doing it - but extremely wary about its predictions of political reactions!

Why not become an MP?

Millionaires can’t get free childcare. The 30hour entitlement is means tested.

I’ve paid voluntary NICs, so where is my refund?

I get what you're saying but as pp said, why would people bother saving more into private pensions if it means having the state benefit reduces? Same as the resentment felt by those who have to sell their very hard won assets to find a bed in a nursing home when Betty next door didn't bother and had the exact same provision.
I do think that we need to look at a much longer term change...the boomer generation are now staring to be replaced by Gen X who haven't benefitted quite so much from house price rises but we've mostly all spent decades now paying in...and I know it's not an individual pension pot and such but it would still garner opposition. If there could be a cross party agreement for a long term plan that will kick in twenty or thirty years time so only the youngest current workers would be affected but have decades to plan, then I think it might be more feasible.

Yes, I do know this. On stats though, tends to be fairly accurate. I do have to add challenge.

I have kids with ehcps. I could tell them how to make my LA massive savings without cutting any provision. My MP won't even meet with me.

Ie if it's not sexy vote winning idea no one cares.

In my case my LA don't know if they have service level agreement software. They had a call with Ofsted and senior managers didn't know why they don't follow legal deadlines and said this in front of the Ofsted inspector.

They are happy paying the fines / compensation. Go figure.