Should the state pension be fully means tested?

in Money Saving Polls
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Former_MSE_ArchnaFormer_MSE_Archna Former MSE
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MSE Staff
Poll Title: Poll Started 29 May 2007. Should the state pension be fully means tested? Most single people above pensionable age who've paid the right National Insurance contributions are entitled to at least £87.30 from the State. This means even multi-millionaires receive it. Which of these deliberately stark choices is closest to your view?

A. All pay in, so all should get something out
B. Don't give it to the rich, then there's more for the poor

Click reply to discuss or vote here.


  • donaldtrampdonaldtramp Forumite
    756 Posts
    Part of the Furniture 500 Posts Combo Breaker
    Of course rich folk, even millionaires, should get this money. They have almost certainly worked for it and through the course of their work have probably brought up many people on benefits.
    For the people who said No they shouldn't get it. Who will pay the taxes to run this country? Why should they just get the money taken from them that they have earned and paid tax on to give to folk who don't pay tax?
    This country needs to learn to admire hard work and be willing to get ahead by work rather than simply relying on hard working people to pay for everyone else!!

  • ManAtHomeManAtHome Forumite
    8.5K Posts
    Part of the Furniture Combo Breaker
    Most high earners will never get back anything close to what they've paid in NI contributions anyway. Maybe there should be a "stark choice" between no NI and pay as you go for health and pensions instead of means-tested dis-incentives to provide for your future...

    Ask anyone who's not getting pension credits as they've managed to save a few quid over their working lives.
  • jtownsonjtownson Forumite
    62 Posts
    I agree with donaldtramp - there has got to be some incentive to go and work hard and earn the money so its only fair they get the same benifits. Otherwise it would be like asking millionaires to pay council tax yet ask them to dispose of their own rubbish!

    Incidently, being quite young I am unsure where all our taxes go exactly - or is this a grey area?? - can any help or correct me;

    Council Tax - (rubbish collection, street cleaning etc, schools, fire, police etc)
    NI - Pensions, dole, NHS??
    Income Tax - No idea!
    VAT - No Idea!
    Fuel Duty - No idea - i hope its green things but probably not
    Alcohol and Cig duty - NHS? - though probably not!
    Stamp Duty - no idea
    Capital Gains Tax....and all the other strange tax's like inheritance tax - if anyone can think of any more - feel free!

    Thanks all
  • cotsvalecotsvale Forumite
    397 Posts
    Part of the Furniture 100 Posts Combo Breaker
    I think everyone should get it but that there should be an opt out clause for those that don't need it and those funds then given to Age Concern or such like to give further help to those that need extra help.
  • ReaperReaper Forumite
    7.2K Posts
    Part of the Furniture 1,000 Posts Photogenic
    While the vote is restricted to the compulsory part of your pension there is a huge downside to all means tested pensions.

    If the government reduces your state pension because you have saved for your own retirement then there is a huge disincentive for people to contribute to pensions. People already don't save enough and any form of means testing just makes that worse.
  • coolambercoolamber Forumite
    3 Posts
    As someone who has helped her in-laws claim Pension Credit I say forget means testing the State Pension. The whole process for PC is dire, no wonder the take up is not as high as they would like. Just at the time when the mind is slowing down the state gives you forms that an agile 19 year old would have trouble with. Parents in law have had three visits from the Pension Service ten miles away (inculding one after my father-in-law died last year). A complete waste of time as mother-in-law is still 85, with only the State Pension as income and a pitiful amount of savings that was collected by my farm labourer father-in-law while they lived in a tide cottage. There is no way that the current administrators could cope with means testing. Why not give all pensioners a decent pension and then let the Inland Revenue cream the excess off from the wealthy that way everyone preserves their dignity.
  • wmfdwmfd Forumite
    12 Posts
    Reasons I backed universal state pension (rather than means testing):

    It recognises that we've all contributed so so all benefit.

    More means testing would make it even harder for people to decide whether it is worth saving (witness the pensions credit) - so making it harder to encourage saving

    Means testing is expensive - it requires armies of bureaucrats/forms/monitoring - which means a lower proportion of the cost goes to beneficiaries

    Means testing often leads to the poorest not claiming their full entitlement - again pensions credit is a great example.
  • Yes all who pay in should get it. If they are rich they will pay 40% tax and see very little of it.
  • Derek_A.Derek_A. Forumite
    74 Posts
    Like many others i have paid in for over 40 years, so as far as i am concerned we are entitled to the state pension.
    I also have to other pensions which i have on average contributed on average 5% of my salary,for over 40 years.
    I now find that i am paying £1600 a year in tax, on my small pensions.
    Where is the insentive to save today?
  • JVMarJVMar Forumite
    2 Posts
    Because of tax there is no real need to means test. In addition, there would be a tendancy to make those in the "Pensions Poverty Trap", where they have small non-state pensions which put them outside the Pensions Credit system even poorer. Govenments would be tempted in these cases to refuse the state pension, thus putting even more old people in extreme poverty. An arbitrary threshold would be set, ignoring circumstances like high Council Tax and Water Rates in some areas compared to others.
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