How could we theoretically means test the state pension?

[Lauriefairycake]

There is a generation of pensioners who have benefitted from massive house price increases and who are now living in very expensive properties and have good pensions plus the state pension to fund it.

I generally do not think that it is fair that for example my dh's grandparents (sahm, one really minor civil servant income) had basically an extra £750,000 to downsize and spend on their retirement.

They really do not need the state pension however we have to consider doing something about that means that people may not save for their retirement

and this problem seems particular to the baby boomer generation and it may never happen again

But if one of our goals as a country is to bring down house prices then surely 'forcing' people to sell their properties will gradually bring the prices down?

//////laurie - your idea about means testing pensions doesn't sound too far removed from robbery to me. people have paid for a pension for years via NI - its just not acceptable to then not provide a pension in return.///////

Brilliant.

/////whilst many laze around doing nothing////

Have you statistical proof of this ?, or are you just parroting the politicians and the media ?

You can't means test the state pension as its linked to NI contributions.

If you choose to make do and mend or go without to pay your mortgage in the earlier part of your life, and to make provision for your kids education, and to have put money aside to help fund your retirement, and paid your NI, so have an entitlement to a pension - what is the problem?

It is unfair to penalise those who have made provision for their retirement. You cannot 'force' people to sell their houses, after all, they own them, have paid for them out of taxed income, so it is nothing to do with you how much they are worth.

As to your comment about ways to get around selling the house to pay for care - renting it out to pay for care meets the dual purpose of part funding the fees and keeping the property available to pass on.

One of your goals may be to bring house prices down - it isn't one of mine, not until I've paid the mortgage off.

So you are planning to sell your home to pay for your care - how are you going to do that if you have already had to sell it to pay for your normal living expenses because the pension was means-tested?

I've been thinking about this one over the last few days.

I definitely wouldn't agree with forcing anyone to sell their home - though I am a strong supporter of Inheritance tax.

I do think that stopping state pensions being universal would be a bad road to go down.

But, given that they are already taxed, I wonder if there would be a case for increasing the tax rate on state pension income for those whose retirement income reaches the 40% band (so having an additional 50% or 60% band on state pension income only).

It would take relatively little from a group of very wealthy pensioners, but it would act to share the impact that current cuts are having with a group who have benefitted from an extremely favourable period in UK history.

Given that they have paid for their pensions, then you take away the incentive to plan for retirement. State pension is also coded out first before tax is applied to occupational pensions.

These pensioners have to fund care anyway, so will be paying for that, and if they are already higher rate taxpayers, why hit them more?

They'll never means test is just like they didn't scrap universal benefits or raise the age at which you can claim them.

I don't see why a person shouldn't sell what they've got to pay for their care, either.

And if we all have to take cuts, including children, then I see no reason why pensioners shouldn't, too.

Pensions are the largest slice of the pie in the welfare budget.

If you were going to means test the state pension it should be based on income (i.e. how much you receive from your private pension) and not on assets. It's not their fault their house is worth a certain amount of money, they just bought a house and probably worked hard for it. They can't take it with them when they die so the value is irrelevant really if they don't want to sell.

I have made a lot of money (in theory) because of house price rises but unless I sell up how do I access the money unless I downsize, my two sons will benifit not me.

As for the state pension, why should it be means tested?, I pay over £2000 a month in tax and NI I think I am entitled to at least an OAP even though my company pension will be in excess of £24K (adjusted for inflation), this is being selfish I have PAID for it already.

I have never claimed any benifit except CB

I can't see how it can be fair to make a pensioner sell their house to pay for their care. Or to be able to maintain a reasonable standard of living if they don't need care.

Why should someone that chooses to buy a house and has spent their life paying for it lose out because someone else that lives on the same road get all that care for free because they have chosen to rent and spend money on holidays rather than maintain a house. Renters arent the ones that have had to save up to buy new boilers or get a house rewired, they pay for that in their rent, often a simeler amount to a mortgage payment.

Old people need care, and we will always have old people. Children need education, and their will always be children. Maybe we should make them pay for that? Oh no, they will pay for that in their taxes as they get older.

Just like the old people already did when they were younger.

'because they have chosen to rent and spend money on holidays rather than maintain a house. Renters arent the ones that have had to save up to buy new boilers or get a house rewired, they pay for that in their rent, often a simeler amount to a mortgage payment.'

Yes, because people who rent only do so to go on flash holidays and buy luxuries.

Not live with the threat of getting moved on with 2 months notice every six months and then pay thousands of pounds every time they do.

And, actually, in many areas, it's cheaper to have a mortgage than to rent. It's just that most renters can't manage to save the amount required for a deposit anymore.

But they pay the mortage off for some BTL landlord.

The argument that 'they have paid for it' is spurious.
I have paid NI for 20 years so far, I will continue to pay it for at least 30 more- do you honestly think there will be state pensions when I retire? Do you honestly think people below 40 now will ever be able to retire?

We will be the first generation to have a lowered life expectancy than the previous one. We will have to work until the grave.
We have had to delay child-bearing/rearing to a later age due to the inflation in housing costs, the abolition of student grants, and the introduction of loans, etc. We will still be raising our children whilst nursing our parents- not that they'll be able to move into our 'family' homes that you cannot swing a cat in- no 'spare' rooms for anyone in my generation.

Enormous housing costs, our children's student fees will ensure we cannot save adequately for our retirement. Those of us in pension schemes are already having T&C changes forced upon us- we won't benefit from what we signed up for. People joining employment now aren't even allowed to join the pension scheme.

Just wanted to get a couple of facts correct:

The basic state pension isn't £70 - it's £97.65pw
Pension Credit tops the pension for a single person with no other source of income to £132.60pw.

'I have paid NI for 20 years so far, I will continue to pay it for at least 30 more- do you honestly think there will be state pensions when I retire? Do you honestly think people below 40 now will ever be able to retire?'

True - but I think it actually applies to those under 50 not 40.
I have done everything I was supposed to do. I saved for my pension since my very first job - I signed a contract - but the rules change all the time, I have to pay more, receive less, work longer...
The notion that I might possibly provide some of the childcare for my daughter's children in the future is a pipe dream.
I feel cheated.
Yes I bought my home a few years ago, yes it is worth more than I paid for it BUT it was not bought for £2/3000, it cost the best part of £150k and I still have a huge mortgage.
There is also not the benefit of knowing you have a 'job for life' in these times.
Frankly, I don't have space in my head to worry about what will happen, I'm struggling to cope with what is happening.
The baby boomers (and I include my own family members) may have had difficult times, they may have paid their dues and they may deserve what they reap now but so do I.
Why should I sell my home to pay for care - I have already paid for the possibility of needing that care.
I have worked blardy hard to pay for my house and inheriting it is the only way my dtr might possibly acquire a deposit for her own home. That and the fact that my disabled son would be homeless...

"I can't see how it can be fair to make a pensioner sell their house to pay for their care. Or to be able to maintain a reasonable standard of living if they don't need care."

And I don't see how it's fair for the working taxpayer to subsidise the inheritance of elderly people's children by paying for care.

'Why should I sell my home to pay for care - I have already paid for the possibility of needing that care.'

No, you haven't. Because the cost of that care is way over and above what you and I paid in NI.

So why should the taxpayer subsidise your child's inheritance?

I'm 39. I'm under no illusions there will be any retirement for me, either.

It's not fair when I'm being expected to pay for babyboomers to live to 100, but that's life.

Assets should be sold to pay for care, it is madness to think anything else.

Yes it presents problems. DH is 7 years older than me, so the situation where we need to pay for care for him while I still need our home to live in is very likely. We will have to prepare for that, and make sure that we've got surplus cash to pay for care, if we want to be sure that I can remain in our home.

Of course I have paid for it. I will only get the basic OAP nothing else, maybe i should not have worked hard and made provisions for myself to have a well funded retirement.

I'll only get that myself, if at all, because the fact is, whatever we pay in isn't enough to support so many living so long.

'And I don't see how it's fair for the working taxpayer to subsidise the inheritance of elderly people's children by paying for care.'

Those children will pay a huge amount in inheritance tax though, so alot of the money will still go back into the system. Regardless of whether or not the old person actually recieves care. Plenty of parents die too young to ever need it, or remain quite healthy until they die.

I do take the point that renters have their own set of expenses too, but the generation that is elderly right now didn't have the problems that people have now with student debt or taking a mortgage.

I'm really thinking about the way things are now, it's all going to be very differnent when we are older, and probably much worse.

It just doesn't seem right to me that two people can make different choices in life but get the same level of care if they need it. Everyone should be entiltled to care from the state, whether they have bought a house or not. It just seems that those people that have worked hard to pay off their mortgages are penalised for doing so, and end up no better of for it in the long run.

'Those children will pay a huge amount in inheritance tax though,'

Not necessarily if you're talking about a house. Unless it's over £325K.

And, once again, you are assuming that everyone who rents is doing so as a choice and are in no way as 'hard-working' as someone with a mortgage.

'Everyone should be entiltled to care from the state, whether they have bought a house or not.'

So you're willing to pay more taxes to fund that entitlement then?