Means Testing of State Pension

Ash_Pole

There's been a bit of talk about this lately, and in its current form and with the country's finances not the healthiest, I think it's inevitable at some point.

Any opinions on what form this could take?

Marcon

Ash_Pole said:

There's been a bit of talk about this lately, and in its current form and with the country's finances not the healthiest, I think it's inevitable at some point.

Any opinions on what form this could take?

These rumours crop up repeatedly and it is invariably completely pointless to speculate.

leosayer

It's already effectively means tested via income tax at 20%, 40% or 45%.

Dazed_and_C0nfused

Ash_Pole said:

There's been a bit of talk about this lately, and in its current form and with the country's finances not the healthiest, I think it's inevitable at some point.

Any opinions on what form this could take?

The current taxation system, which depending on your view is an alternative type of means test, works reasonably well just as it is.

badmemory

I expect eventually they will means test it in a similar way that they do child benefit & gradually claw it back.  I also expect eventually they will get rid of WFP & also the Xmas bonus.  If you consider the costs of all those letters they send out, they must be astronomical.  I wouldn't be surprised if the Xmas bonus letter doesn't cost more to generate & send than the £10 that people get.

Grumpy_chap

The OP may find this thread worth a read.
https://forums.moneysavingexpert.com/discussion/6613856/topping-up-ni-contributions-if-the-government-are-going-to-means-test-state-pensions#

FWIW, I do not think SP will go towards a mean-test in a similar way to HICBIC as suggested by @badmemory
The law of unintended consequences would probably apply in that, if SP were to be means tested, the level of private pension provision / saving would reduce and, hence, the eligibility for SP increased.

dunstonh

There's been a bit of talk about this lately, 

has there?
Care to give some examples of where?

Hoenir

Ash_Pole said:

Any opinions on what form this could take?

By any number of measures with regards to personal tax allowances and income tax rates. Which will raise the same amount of tax revenue. Without the need to employ an army of civil servants at a huge cost which would result in a neligble net amount of tax being collected. 

Lowering the ISA cash savings limit is one alternative. Or reintroducing taxation at source on savings interest is another. 

artyboy

Oh good grief, not again... 

Cobbler_tone

Love a bit of scaremongering.
Anything is possible. Higher taxes (almost a guarantee at the next budget but who knows from where?), increases to pension age, benefit cuts (topical), life time allowance, ISA’s, IHT etc.
Let’s hope any possible future means testing on the state pension is on a par with the WFA. 

I personally prefer to spend my time not worrying about things I can’t influence.
I heard it on this thread, it’ll soon be passed off as fact in some workplace.

As an aside, I found it interesting reading the split of income tax and national insurance that funds the pension in my personal breakdown. We know the spending on defence is going to increase.