Means testing state pension?

lisyloo

zagfles wrote: »

I imagine they'll carry on with the current solution - increasing the state pension age.

I don’t think this will work very well.
People are living longer for sure, but most people in their 60s have some sort of health issue and are mostly ruled out of the most physical jobs.
Raising the age suffers from a law of diminishing returns as an increasing % will be unfit for work, so I think there is a limit to this.

Adding NI or some other tax increase would work better.

zagfles

waveydavey48 wrote: »

https://www.moneywise.co.uk/news/2018-11-23/uk-state-pension-should-be-means-tested-says-international-monetary-fund

This is a prime example of media misinterpretation and hysteria - write something controversial as click bait. Journalists want stories to get read, the more controversial they are, the more likely there are to get read. So if they exaggerate and extropolate from something quite reasonable to something which will get people foaming at the mouth they've done their job, they'll get the clicks.

Here's the IMF report they are quoting:
https://www.imf.org/~/media/Files/Publications/CR/2018/cr18317.ashx
What they acutally said was "means testing for access to social benefits in old age could also be used to improve sustainability while safeguarding the most vulnerable".

They don't actually suggest means testing the state pension. They specifically mention the "state pension" in relation to other possible savings such as the indexation method and age, but not where they suggest means testing.

They suggest means testing for "social benefits", which might include stuff like the winter fuel allowance, prescriptions, free TV licence, bus passes etc.

p00hsticks

lisyloo wrote: »

Adding NI or some other tax increase would work better.

And the other option is to remove the triple lock and freeze increases, as has already happened with other benefits and public sector wages, so that the real value of the state pension is gradually eroded.

waveydavey48

zagfles wrote: »

This is a prime example of media misinterpretation and hysteria - write something controversial as click bait. Journalists want stories to get read, the more controversial they are, the more likely there are to get read. So if they exaggerate and extropolate from something quite reasonable to something which will get people foaming at the mouth they've done their job, they'll get the clicks.

Fair comment. I don't suppose for a moment such a radical policy would be implemented any time soon if ever. The point of my original post was whether it is wise to use up my DC pot in the expectation that the SP will always be there in the form it is.

We are talking about a timescale of (hopefully) 3 decades or so and what was unthinkable 30 years ago may not be so now. I suppose one solution is annuities which, whilst poor value, do at least provide some certainty.

Thank you for your reply.

Sea_Shell

I'd suggest trying to ignore SP and make your own arrangements...then if you still get it, in 30 years time, it'll be a nice bonus.

Silvertabby

zagfles wrote: »

This is a prime example of media misinterpretation and hysteria - write something controversial as click bait. Journalists want stories to get read, the more controversial they are, the more likely there are to get read. So if they exaggerate and extropolate from something quite reasonable to something which will get people foaming at the mouth they've done their job, they'll get the clicks.

Here's the IMF report they are quoting:
https://www.imf.org/~/media/Files/Publications/CR/2018/cr18317.ashx
What they acutally said was "means testing for access to social benefits in old age could also be used to improve sustainability while safeguarding the most vulnerable".

They don't actually suggest means testing the state pension. They specifically mention the "state pension" in relation to other possible savings such as the indexation method and age, but not where they suggest means testing.

They suggest means testing for "social benefits", which might include stuff like the winter fuel allowance, prescriptions, free TV licence, bus passes etc.

As a tax paying pensioner (albeit not yet old enough to receive my State pension) I don't have a problem with that. Perhaps that way the winter fuel allowance could be increased for those who really need it, rather than being thinly spread and paid to those of us who, in all honesty, don't actually need it.

Bracing myself for screams of 'but I'm entitled to it - it comes in handy for the Christmas booze bill - etc'

....And don't get me started on 'free' prescriptions just because you are 60. That should have been linked to pension credit age years ago, and so would now be the same as State pension age

bluenose1

The UK already has the lowest State Pension in Europe, lower than most developed countries. My assumptions are based on it still existing when I can take it in 15 years.

Rich2808

westv wrote: »

No
Never
Won't happen.

How can you be certain that will not happen given expected changes in the age profile of the population over the next 30 years. Although if the govt keeps putting up the state pension age a large proportion of the population will never live long enough to claim one!

For every year you work past 65 apparently your life span falls by 3 years on average - based on actuarial averages. And if there are fewer workers for every pensioner there is less resource available to pay pensions as they are paid out of current funds as NI contributions are not invested.

brewerdave

Personally haven't got a problem with doing away with the triple lock. Maybe tie increases to CPI only as per GMP increases?? Too many people are totally dependent on SP to freeze increases altogether.
Means testing of certain social benefits?
1.Several years ago on these forums, when I suggested this,I was assured that the cost of means testing the Winter Fuel Payment would exceed the amount actually paid out.It has been frozen at the current level for 8 years now anyway
2. No sensible way to means test free prescriptions -as suggested should be linked to SPA rather than 60; can't see the NHS being enthusiastic either, as they would have a rash of people not taking essential medications due to costs.
3. Over 75s TV license - BBC are desperately trying to get out of issuing them currently since the Govt. has passed them the ball!!
4. Pensioner bus passes -as they are issued by local authority no way to link to Inland Revenue to means test - also without the "subsidy" many more local bus services would vanish at a time when we are being encouraged to use public transport. The service thru my little conurbation is almost exclusively used by people bearing passes during the non rush hour period.