Will state pensions EVER be means tested ?

TRUSt_NO_1_2

Any thoughts on this one ?


(Aegis-as you seem to respond to my posts pretty quickly)

michaelvintner

I hope not. Regardless of income, and at the moment I am on a low wage. If someone has been making contributions towards it why should they not be able to take it when they retire.

Something you have been paying towards should not be means tested at the end.

That is my opinion anyway.

ManAtHome

Ever is a long long time... Woudn't surprise me - poundland seems to be on the slippery slope - ever more slippery since "prudence" turned up and made thieving from the future an art-form. The current crooks will have legged it long ago (on vastly inflated backhanders/"pensions") by the time the sheep/voters have noticed...

seven-day-weekend

They certainly shouldn't be. But as the above poster says, ever is a long time.

mystic_trev

In effect they already have. Someone here will come up with the figures, but State Pensions haven't kept up with Inflation, which is why so many people can claim 'Pension credits' I really can't see the situation getting any better. State Pensions will contine to fall against the cost of living, so more people will become eligible for 'Top ups'

CLAPTON

Pension used to be linked to average earning but the Thatcher government changed that and only linked it to inflation (which gives a lower pension).

Currently, pensions are means tested because if you are poor you can get pension credits that increase your pension..... it seems odd that people on low income would want the means testing to stop as it increases their income.. bizarre

DavidLaGuardia

CLAPTON wrote: »

..... it seems odd that people on low income would want the means testing to stop as it increases their income.. bizarre

The poorest maybe, but there are many people of very modest means who might have prudently put something into a pension when times were better only to find a considerable deduction in the MIG top up because of this.

clipboard2

michaelvintner wrote: »

I hope not. Regardless of income, and at the moment I am on a low wage. If someone has been making contributions towards it why should they not be able to take it when they retire.

Something you have been paying towards should not be means tested at the end.

That is my opinion anyway.

Hate to mention it, but the tax and NI you are paying during your working life now are being used to pay the pensions of todays pensioners. It will not pay your future pension. The reality is that the books are not going to balance in future, due to people living longer and an increasingly 'grey' population in the West. The state pension is becoming unaffordable.

The DWP (Pensions Dept) and the Pension Providers know this, and that is one reason why people are being encouraged to look upon property as an investment for retirement funding. Equity release has a bad press, so providers are coming up with renamed schemes eg "lifetime mortgages" marketed at the 50-85 age group. Yep, you can remortgage at 85....

One question the DWP client always asks on surveys is:
"Do you think there will be a state pension when you retire?"
Nearly all aged under 40/45 think not.

I wonder why the DWP wants to know....

jamesd

Yes pensions are going to be means tested. Not when you take the money but when you pay in. The current plan is to increase the state second pension contribution value of the poorer contributors by taking contribution money from those near and above average income. At the end the state second pension will be flat rate for payments even though what you pay in depends on your income.

Both the basic state pension and additional state pension benefits are are also being reduced retroactively by increasing the retirement age.

clipboard2, the plan is that there will be a state pension and for low earners it'll pay out just a little above the means tested benefit level when it's topped up by S2P and the planned personal pension savings plan. High earners will get more from the personal pension plan so they do better than benefit levels.

EdInvestor

CLAPTON wrote: »

Pension used to be linked to average earning but the Thatcher government changed that and only linked it to inflation (which gives a lower pension).

The earnings link is to be restored in 2012.

Currently, pensions are means tested because if you are poor you can get pension credits that increase your pension.....

Only the pension credit top-up is means-tested.

The state pension is yours by right in accordance with how much you have contributed and is unaffected by the amount of your other income.

CLAPTON

EdInvestor wrote: »

The earnings link is to be restored in 2012.




Only the pension credit top-up is means-tested.

The state pension is yours by right in accordance with how much you have contributed and is unaffected by the amount of your other income.

2012 is after the next general election....