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State Pension to be means tested?

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Talk Wrench

Talk Wrench

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Rumours are rife regarding the State Pension.

Within a couple of years, those planning to retire and in receipt of private, company, mil pensions / other incomes etc will be means tested when they apply for their state pension. This could mean that many people could lose their state pension completely.

Should we scoff at the rumours or should we all prepare for poorer futures?
 
Ah, okay. We can all prepare to be poorer though, but that's the national trajectory we're on, cue opinions of differing colours as to the reason(s) why.
 
No chance it will become means tested, but every likelihood that the qualifying age will be raised to 70 in the next 15 years and possibly 75 by the time my kids are due to retire. There are too many pensioners living longer than expected, and not enough young people working enough hours to pay for them all.

If only we had a large amount of young men of working age out grafting instead of sitting around hotels waiting for their asylum claim to be heard....
 
Talk Wrench said:
Rumours are rife regarding the State Pension.

Within a couple of years, those planning to retire and in receipt of private, company, mil pensions / other incomes etc will be means tested when they apply for their state pension. This could mean that many people could lose their state pension completely.

Should we scoff at the rumours or should we all prepare for poorer futures?
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It would fit with the current government approach to looking at cutting spending when possible. It would also fit the "not affecting working people" edict. So if you subscribe to the view that if your deemed comfortably off, via means testing, without a state pension why do you need it? Then it could very well become a thing. On the downside it makes saving for your private pension, or any other pensions accured in your working life a bit pointless if the good financial planning you carried out to provide for the twilight years means the state then abandoning you and yours soley because you worked hard and planned ahead. We could perhaps end up in a situation where being a work shy system user claiming from the state in your earning years is the way to lock in your future state pension. Hopefully it stays merely as a nasty rumour put around to frighten old people.
 
Seems other countries already do carry out a form of means testing Australia and Ireland for example. The figures on the cost of providing a universal state pension, regardless of circumstance, in the decades ahead are quite astronomical

rtsfinancialplanning.co.uk

Is The UK State Pension Heading For Means Testing? - RTS Financial Planning

Tags: Age Pension, Australia, Means test the State Pension, Pension Credit, State pension
rtsfinancialplanning.co.uk rtsfinancialplanning.co.uk
 
It will be the act that destroys any political party, permanently, if done with any semblance of fairness would have to be fazed in, so benefits would be for future government.
 
The state pension is taxable, so those of us with occupational pensions will end up paying tax on the state pension at 20 or 40%

I still think that there will be rises in the qualifying age announced before the end of this parliament. Hopefully those affected will not bury their heads in the sand for 15 years like some of the Waspi women did
 
busby1971 said:
It will be the act that destroys any political party, permanently, if done with any semblance of fairness would have to be fazed in, so benefits would be for future government.
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Some party is going to have to get a bit tougher. Cameron's triple lock bribe of 2010 is a millstone round the countrys neck.
 
My wife and I both get state pensions and have decent occupational pensions. The state pension is deducted from your tax free allowance so you pay more tax on your occupational ones. Still it's a lot less than we were paying when working! No National Insurance though.
We manage well enough, but we did plan for our retirement and stopped work earlier. Me 63 my wife 60. Best spend it all while we are fit enough.( No kids).
I can see it being means tested at some time, hopefully not in our lifetime.
 
So having worked for well over 40 years without a break and receive my military pension and maybe means tested, does the lazy fooker who has contributed zero % will get a better pension, is that right in my thinking...
 
norfolkred1 said:
So having worked for well over 40 years without a break and receive my military pension and maybe means tested, does the lazy fooker who has contributed zero % will get a better pension, is that right in my thinking...
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Maybe it's not just a better pension he gets but one you don't even receive because you chose to have an actual job and work for a living. The political parties (of any colour rosette) will have to tread very carefully around state pensions or they will be toast. The snag is we generally now live longer and there's more of us so the national pension bill continues to climb. Fixing that financial problem without peeing people off is a difficult conumdrum for any party.
 
What further complicates the issue (but maybe offers a way out...) is that raising the pension age (inevitable in my view) may be feasible for those of us with jobs that are not physically demanding but there are some jobs where physical health and wellbeing are more necessary. Science may be keeping more of us alive for longer but it is struggling to keep us physically fit for as long as we live. So, maybe, the pension age will cease to be a one size fits all affair and some form of health/fitness assessment will also be introduced alongside, possibly, a means test.

How the medical profession would cope with having to do such assessments I don't know and what the societal response will be to the idea that X can retire on a pension younger than Y because X has a harder job or worse health than Y. Especially if X is a smoker and heavy drinking lazy bastard while Y is a gym going, healthy eating, 'one small sherry at Christmas' character. The harder to change genetic and socio-economic factors that influence health as you get older would also be complicating factors.

We face interesting times.
 
Triple lock has done what it needs to do and should be reviewed, just link it to wage growth and leave it at that.

Once the politicians start to play around with eligibility and health based start dates it’ll all get messed up, so best just leaving it as a universal entitlement.

If you are a heavy smoker or have other health issues that may impact on your life expectancy then if you are about to take out an annuity let the providers know and they should give you a better rate than if you were normally healthy for your age.
 
norfolkred1 said:
Labour will either freeze you to death or work you to death. A 40 ton truck driven by a 70 year old does not fill me with much confidence.
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Just for context:

Tories introduced the increase in pension age for Women in 1995. Labour introduced the gradual increase in pension age for all in 2007. Tories twice accelerated the effective date in 2011 and 2014.

Both are responsible, and in 2019, the Tories again indicated that the need to increase the qualifying age was inevitable, as the number of pensioners was predicted to be 21% by 2040 from its (then) 18%. The subsequent pandemic and the amount spent to keep pensioners alive means that its even more inevitable that the qualifying age will increase.
 
fourteen2two said:
My wife and I both get state pensions and have decent occupational pensions. The state pension is deducted from your tax free allowance so you pay more tax on your occupational ones. Still it's a lot less than we were paying when working! No National Insurance though.
We manage well enough, but we did plan for our retirement and stopped work earlier. Me 63 my wife 60. Best spend it all while we are fit enough.( No kids).
I can see it being means tested at some time, hopefully not in our lifetime.
Click to expand...
How did you wangle that?
 
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