Means Testing of pensions?

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  • burning dog
    Full Member
    • Dec 2010
    • 1511

    Means Testing of pensions?

    An Advisor to the new chancellor, ex HMRC man and previously advisor to Ken Clarke, thinks this may be a good idea.

    There is an efficient system of progressive taxation in place, which is used to tax wealthy pensioners at a higher rate, this is open to amendment (Increase!!!) without much admin. Much more efficient than means testing and without the stigma. I think its because they have promised not to raise income tax or national insurance, and they think most pensioners vote Tory anyway, but there are still enough labour voters in this age group to be significant. They imagine only Tories will be against it.

    In fact they are abolishing the State Pension and turning it into part of a Pension Credit. This mean to apply for the full state pension you may have to, as separated person living in a house with your ex partner, have a form to fill in saying that you keep your food in different places , usally eat at different times, sleep in a different bed etc.

    From reading Mumsnet regarding Universal Credit, not Pension Credit - Allegedly if you have sex with them occaisionaly it's OK, thats a casual thing!!!!

    It appears it's to stoke up jelously of "Boomers" among younger people, as if they all bought a house fairly young and had well paid jobs. I'd point out that possibly a majority, or certainly very large minority of people now aged over 67, left school at 15 and paid tax and N.I for 51 years. Anyway I have thought it's very much LATE boomers and a slightly younger cohort that were early in property purchasers.


    Up until now I've voted Lib-Dem tactically a few times but maybe not tactically in future. Statistically I've still got 3 general elections in me. "PG" as my nan would have said.



    I don't think my relatively small company pension, plus my soon to be qualified for state pension would make me "rich", so it's not a personal concern.



    Means Testing makes me think of Hunger Marches, but perhaps not many in the present labour circles.
    Last edited by burning dog; 19-07-24, 04:57.
  • smittims
    Full Member
    • Aug 2022
    • 4141

    #2
    I know nothing of economics, but I've always thought Income tax should be the only tax, as it is the fairest. VAT is not a fair tax. I understand some countries (Sweden?) have high tax because they provide much more welfare for those in need. I'm very much in favour of higher tax for the rich. Some rich people are really quite obscenely rich (i.e. the sort of money most of us can't even imagine) and could well afford to support the needy better.

    Comment

    • burning dog
      Full Member
      • Dec 2010
      • 1511

      #3
      I agree . A higher tax for the rich is needed, but not so high that nearly everyone will attempt to avoid it (83% top band in the 70s). Of course some super rich people don't think they should pay any tax at all.

      Pensioners paying N.I. on additional earnings* would be preferable to means testing and less burdensome for the state, for those richer pensioners who don't get up to higher bands.
      Last edited by burning dog; 22-07-24, 10:57. Reason: change pensions to earnings

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      • teamsaint
        Full Member
        • Nov 2010
        • 25206

        #4
        Means testing should be avoided at all costs.

        we need a better integrated tax and NI system, with small steps in tax levels, and proper consideration of the societal effects of other taxes.

        Last edited by teamsaint; 19-07-24, 19:41.
        I will not be pushed, filed, stamped, indexed, briefed, debriefed or numbered. My life is my own.

        I am not a number, I am a free man.

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        • teamsaint
          Full Member
          • Nov 2010
          • 25206

          #5
          Originally posted by smittims View Post
          I know nothing of economics, but I've always thought Income tax should be the only tax, as it is the fairest. VAT is not a fair tax. I understand some countries (Sweden?) have high tax because they provide much more welfare for those in need. I'm very much in favour of higher tax for the rich. Some rich people are really quite obscenely rich (i.e. the sort of money most of us can't even imagine) and could well afford to support the needy better.
          I don't agree that IT should be the only tax, actually, with respect . ( Actually , nobody really understands modern economics except maths geniuses !) Tax isn't fair. Fairness can only be one ( albeit significant) aspect of the way we are taxed. I'm sure that efficient and relatively fair systems involve taxes on income, wealth and spending, because otherwise the potential for evasion is just too great.These elements of taxation should ideally be simple, with as few loopholes and allowances as possible. The more govts fiddle with small elements, the worse systems become.

          All just IMHO.
          I will not be pushed, filed, stamped, indexed, briefed, debriefed or numbered. My life is my own.

          I am not a number, I am a free man.

          Comment

          • eighthobstruction
            Full Member
            • Nov 2010
            • 6436

            #6
            ....and it's regularly interjaculated that - don't under-estimate how much means testing costs....
            bong ching

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            • oddoneout
              Full Member
              • Nov 2015
              • 9177

              #7
              Originally posted by eighthobstruction View Post
              ....and it's regularly interjaculated that - don't under-estimate how much means testing costs....
              Especially given the track record of government IT systems that are needed to implement such schemes and the subsequent mistakes and appeals that have to be dealt with.

              Comment

              • burning dog
                Full Member
                • Dec 2010
                • 1511

                #8
                Quite right Mr Obstruction (and teamsaint). Means testing is costly and de-meaning. I think only the Australians have attempted this.
                Last edited by burning dog; 21-07-24, 08:04.

                Comment

                • CallMePaul
                  Full Member
                  • Jan 2014
                  • 789

                  #9
                  Originally posted by burning dog View Post
                  Pensioners paying N.I. on additional pensions would be preferable to means testing and less burdensome for the state, for those richer pensioners who don't get up to higher bands.
                  I have always been under the impression that National Insurance was a contribution to the State Pension scheme. If working pensioners are required to pay it will that break the link? Also, if Rishi Sunak's wish to abolish National Insurance ever comes to fruition, how will eligibility for State Pension be assessed? I receive State Pension (old rate) because I paid Nat Ins. My partner worked abroad for several years in the 80s/90s and her (new rate) pension was reduced as she did not meet the Nat Ins contribution requirements for the full pension.

                  Comment

                  • Petrushka
                    Full Member
                    • Nov 2010
                    • 12245

                    #10
                    As far as I am aware no mention has been made by the new government regarding means testing of pensions. It wasn't in the Labour manifesto and they have committed to retaining the triple lock on the State Pension.

                    Is there a link which states otherwise because it looks suspiciously like Tory scaremongering from the Express, Mail or Telegraph to me.
                    "The sound is the handwriting of the conductor" - Bernard Haitink

                    Comment

                    • burning dog
                      Full Member
                      • Dec 2010
                      • 1511

                      #11


                      The comment was by Sir Edward Troupe, an advisor to the new Government on LBC, July 3rd - a radio station which has a number of "centerist Dad (Mum?)" journalists who are considered to be generally hostile to the previous Tory Government.

                      "The state pension may also need to be means-tested at some point in the future thanks to the spiralling cost of the bill to the taxpayer, Sir Edward admitted."

                      It was denied by the labour party but saying this the day before election is not a wonderful move by him.
                      .


                      Labour distanced themselves from the comments made by their new adviser.

                      A party spokesperson said: "These are not Labour Party policies".


                      Best to get a new advisor IMO
                      Last edited by burning dog; 22-07-24, 03:41.

                      Comment

                      • cloughie
                        Full Member
                        • Dec 2011
                        • 22119

                        #12
                        Originally posted by Petrushka View Post
                        As far as I am aware no mention has been made by the new government regarding means testing of pensions. It wasn't in the Labour manifesto and they have committed to retaining the triple lock on the State Pension.

                        Is there a link which states otherwise because it looks suspiciously like Tory scaremongering from the Express, Mail or Telegraph to me.
                        Also means testing can be quite expensive to administer and I think that the new government will look for some simpler of tinkering with taxation of pensions of those in excessively high income from pensions.

                        Comment

                        • burning dog
                          Full Member
                          • Dec 2010
                          • 1511

                          #13
                          [QUOTE=CallMePaul;n1312968]

                          I have always been under the impression that National Insurance was a contribution to the State Pension scheme.
                          /QUOTE]

                          I meant to say on additional earnings,

                          I will soon be working beyond my retirement and would rather pay a small tax,or levy, call it care tax, on them, rather than have people being means tested, which I regard as wicked not just unfair. I'd rather they didn't do either.
                          Last edited by burning dog; 22-07-24, 10:55.

                          Comment

                          • burning dog
                            Full Member
                            • Dec 2010
                            • 1511

                            #14
                            Originally posted by cloughie View Post

                            Also means testing can be quite expensive to administer and I think that the new government will look for some simpler of tinkering with taxation of pensions of those in excessively high income from pensions.
                            This point has been made a few times above

                            . Despite this The Australians have tried it!!

                            I just find it appaling that an advisor to a Labour Chancellor has failed to rule it out. I'd expect nonsense like this from a Tufton Street "Think Tank"
                            Last edited by burning dog; 22-07-24, 10:58.

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                            • french frank
                              Administrator/Moderator
                              • Feb 2007
                              • 30276

                              #15
                              Originally posted by burning dog View Post
                              Labour distanced themselves from the comments made by their new adviser.

                              A party spokesperson said: "These are not Labour Party policies".


                              Best to get a new advisor IMO
                              But the lbc article says: "Sir Edward Troup, the former HMRC Permanent Secretary, is one of a new panel of experts Labour has appointed to advise on its efforts to “modernise” the tax office." He doesn't seem to be even speaking to his remit. That said, as an adviser he does seem a dubious choice; but it will be what the government chooses to do that matters.

                              It isn't given us to know those rare moments when people are wide open and the lightest touch can wither or heal. A moment too late and we can never reach them any more in this world.

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