Means Testing of pensions?

[vinteuil]

Polly Toynbee in The Guardian -

https://www.theguardian.com/commentisfree/article/2024/aug/02/labour-right-ditch-winter-fuel-allowance-it-isnt-robbing-old-people

.

[french frank]

Polly Toynbee in The Guardian

Never one of my favourite columnists, but she makes her points (and mine, incidentally!):

However, averages stink in this grossly unequal country, and 2 million pensioners are still poor. An alarming one in three of those entitled to pension credit don’t claim it. Reeves promises a campaign to find them: credit is the vital gateway to housing benefit, council tax support and free TV licences. But claiming is difficult and take-up campaigns have failed in the past. It’s hard to understand why, when the state knows where every pensioner lives. In addition, Reeves needs to raise the threshold so that more people are entitled to pension credit, taking from richer pensioners to give to those who are poorer.

[Dave2002]

I don’t know the details, but maybe pensioners in Scotland will still get the WFA - something about devolved powers - or is that just a rumour or mis-information?

[burning dog]

Pooly Toynbee has been spouting off about means testing the state pension since 1992.



A period of silence from her would now be welcome.


If rich people like her want to help the poor, they should campaign to pay more tax, not means test those JUST out of poverty, like the Australians do.


Means tested benefit is a cold grey loveless thing. If Ms. Toynbee wants to help the poor, she should pay her taxes gladly, not suggest the state doles out money as a "favour".

[french frank]

Means tested benefit is a cold grey loveless thing. If Ms. Toynbee wants to help the poor, she should pay her taxes gladly, not suggest the state doles out money as a "favour".

It may be a mistake to focus on means testing as single tool, in a vacuum, rather than just one of a package of ways of relieving various kinds of social poverty.

[Ian Thumwood]

I was intrigued to see this thread as I was thinking along the same lines. I am amazed that the rich can still receive a state pension. I believe that it would be fair to means test the pensions so that only people who genuinely need this income and that the rich must live off their work pensions.

It seems perverse that people who are rich then get more money from the state. It would be better if the state pension was increased for those who most need it whereas the rich live of their own means. A sliding , progressive scale should be used.

[LMcD]

I was intrigued to see this thread as I was thinking along the same lines. I am amazed that the rich can still receive a state pension. I believe that it would be fair to means test the pensions so that only people who genuinely need this income and that the rich must live off their work pensions.

It seems perverse that people who are rich then get more money from the state. It would be better if the state pension was increased for those who most need it whereas the rich live of their own means. A sliding , progressive scale should be used.

Surely anybody who has contributed towards a state pension shouldn't be denied it! And can we assume that all rich people have work pensions?

[Ian Thumwood]

Surely anybody who has contributed towards a state pension shouldn't be denied it! And can we assume that all rich people have work pensions?

Yes they should be denied it. Pensions were introduced to support the economically disadvantaged in the early 1900s. It is not affordable in 2024 and not necessary for those with large ,private pensions.

[Serial_Apologist]

I think that behind paying rich and poor alike the State Pension was the rose-tinted idea that the wealthy would thereby be made to feel part of the society they lived off, and think and act more generous spiritedly.

That only became temporarily the case during WW2, when enough of them finally came face-to-face with working class people. I know: I was sent to a private school in order to avoid them; and my parents were only lower middle class.

That and not needing an expensive department for organising the means testing.

[oddoneout]

I was intrigued to see this thread as I was thinking along the same lines. I am amazed that the rich can still receive a state pension. I believe that it would be fair to means test the pensions so that only people who genuinely need this income and that the rich must live off their work pensions.

It seems perverse that people who are rich then get more money from the state. It would be better if the state pension was increased for those who most need it whereas the rich live of their own means. A sliding , progressive scale should be used.

The state pension is included in their income for tax purposes, it isn't received tax free.

[french frank]

The state pension is included in their income for tax purposes, it isn't received tax free.

Also, what would be a wealthy penioner in terms of income? Many may have paid off mortgages and have lower outgoings for rent &c. And they may be considered wealthy if their family house is worth quite a lot. What level of income would we be thinking of for a wealthy pensioner?

[Ein Heldenleben]

The state pension is included in their income for tax purposes, it isn't received tax free.

The other point to make is that collecting tax on income is a lot simpler and cheaper than means testing which is one of the reasons that the Treasury have always been lukewarm on the idea.
A much more significant question is the so called triple lock which is more difficult to justify.

[Ein Heldenleben]

[QUOTE=french frank;n1323476]

Also, what would be a wealthy penioner in terms of income? Many may have paid off mortgages and have lower outgoings for rent &c. And they may be considered wealthy if their family house is worth quite a lot. What level of income would we be thinking of for a wealthy pensioner?[/QUOTE

this is a reasonable assessment from the Pensioners and Life Savings Association. For a single person

• £14,400 per year for a minimum retirement
• £31,300 per year for a moderate retirement
• £43,100 per year for a comfortable retirement

£43,000 sounds a lot but with prices they way they are now its really not…

I would have thought a Headmaster , University senior Lecturer or Professor with 35 to 40 years of contributions would be near or over that level. A Doctor would be on the £55,000 to £65,000 mark maybe more. (N.Bl the state pension would be on top) .

As a comparator a senior private sector businessman might have a similar pension but very considerably more wealth in cashed in share options , property etc

Sadly few people reach that comfortable level. I spent a lot of time as a manager explaining to people just how good the (now closed ) BBC defined benefit pension scheme was and the Importance of buying added years and paying in as much as possible. It always amazed me how few acted on the advice.

[LMcD]

£14,400 per year for a minimum retirement[*]£31,300 per year for a moderate retirement[*]£43,100 per year for a comfortable retirement[

Oh dear ....I didn't realize how desperate my situation was! I think I'd better see if I can make one tea bag last for 3 mugs instead of 2

[french frank]

Oh dear ....I didn't realize how desperate my situation was! I think I'd better see if I can make one tea bag last for 3 mugs instead of 2

And me! So many different aspects come into play, What people have been used to and what they still want; whether one belongs to the 'precariat' - not fully in control of one's situation (eg renting and liable to eviction, still needing to work to support a family member and liable to lose one's job). And then as Logan Pearsall Smith wrote: "Solvency is entirely a matter of temperament and not of income." One person's 'plenty' is another's 'not enough'. Who adjudicates?