Possibility of means testing UK state pension in the future?

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joe sod

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Just to clarify, I have already qualified and bought back voluntary contributions at class 3, I have already transferred the guts of 11,000 euros to buy back those years, alot of money, and will be buying more in the future at 820 pounds per year.

However in the UK like here there is this speculation that a future government due to rising costs of state pension (even though you have paid your contributions for this) could be means tested.
I know this applies to everyone however it is one thing to have a benefit removed due to involuntary contributions from your wages, still highly controversial but it would be a real kick in the teeth for someone like me who has voluntary transferred a large sum of money to basically buy this benefit.
Surely some distinction or at least a reduced benefit would still have to be paid despite the potential future financial situation of a government. If governments were to renege on a universal benefit that most have paid contributions their entire working life it would undermine the whole social insurance system?
 
I have been told it will never happen.
I have been told that we cannot afford to keep paying the State Pension at current rates.

All I will say is hard times require hard decisions. I would at least expect the value of the state pension to be eroded overtime when everyone has their own (Non State) pension.
 
Just read an article about a review of the state pension in UK, they looking at increasing the retirement age again , it's now 67, maybe they increase it to 68. I was hoping that this wouldn't be happening so fast, it probably be 70 by the time I'm there
 
joe sod said:
Just read an article about a review of the state pension in UK, they looking at increasing the retirement age again , it's now 67, maybe they increase it to 68. I was hoping that this wouldn't be happening so fast, it probably be 70 by the time I'm there
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Read about it yesterday too. They review it every 6 years. 2017, 2023 and this review is to be complete by 2029. You could presume it goes up a year every 6 years at worst.
 
Thankfully the wait is over for me. I reached uk state pension age 2 weeks ago (66. For anyone born before April 1960 it's 66 and not 67).

I just wish they'd hurry up and credit my final 2024/2025 class 2 nics that I paid on 12 April.
 
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@Telecaster
Did you receive an invitation to claim letter? Did it state how much you'd be getting? I imagine if they've not yet allocated your most recent contributions, they'll get round to it at some stage, and it will then include back payments to your 66th birthday.
 
Towger said:
I would at least expect the value of the state pension to be eroded overtime
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The government view all recipients of the State pension as the same. That includes people who the State pension is their only source of income and multi millionaires. Unless they find a cheap way of distinguishing between those who rely on the State pension* and those that don't, they have to maintain some sort of indexation. Of course, increasing the pension age is the simplest, quickest and cheapest way of keeping the cost down but that was shot down. It really should be revisited.


* There are of course a lot of people who earn decent enough money but have decided not to save for retirement and spend their money now instead. They will be in for a shock when they can no longer change the car every 3 years and have to live on €15,000 a year and get to retire when the government tells them they can retire and not when they want to.

Edit: I was incorrectly talking Irish pensions
 
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Steven Barrett said:
. Unless they find a cheap way of distinguishing between those who rely on the State pension* and those that don't, they have to maintain some sort of indexation.
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What about the distinction between people who have paid their contributions for state pension and those that haven't, that is the main reason they can never bring in means testing. However they could allow the state pension to gradually erode by not raising it and then giving a separate means tested top up to those that are totally dependent on it . However we are not taking about socialist Ireland here but uk , they are just going to increase the age for everyone to get the pension
 
TomEdison said:
Yes, but they don't have to maintain the generous indexation that they currently have.
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I was incorrectly talking about our own pension issues and not the UKs. I 100% agree, the triple lock is insane. Like here, pensions is a political hot potato, with many headlines about pensioners having to pay tax on their pensions...because the increases are so big!! You'd think dropping one or two of the three locks would be palatable but with the populist Reform party snapping at Labours heels, it would be a hard sell.
 
joe sod said:
What about the distinction between people who have paid their contributions for state pension and those that haven't, that is the main reason they can never bring in means testing. However they could allow the state pension to gradually erode by not raising it and then giving a separate means tested top up to those that are totally dependent on it .
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They're way ahead of you, Joe. In the UK Pension Credit is a benefit payable to anyone over retirement age whose weekly income is less than (currently) £218. The full rate of the basic state pension for a single person is currently £176, so a pensioner whose only income is the basic state pension will qualify for pension credit on top of that.

So, yeah, they could freeze the basic state pension, or grant only very modest increases, and compensate pensioners with no other income by increasing the pension credit. But the political commitment to the "triple lock" increases in the state pension is very strong and, as Stephen points out, the political cost of dropping it would be high.
 
Lisgoold said:
Did you receive an invitation to claim letter? Did it state how much you'd be getting? I imagine if they've not yet allocated your most recent contributions, they'll get round to it at some stage, and it will then include back payments to your 66th birthday.
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No nothing received. I called them at the end of (edit: May) March and the very helpful person took all the details and filled in my claim over the phone, and told me there was nothing more to do. I've heard nothing since then.

Hopefully I should get a first payment in a few weeks as it's usually paid about 4 weeks in arrears as far I understand it.
 
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The IFS in the UK wrote a report on the future of the state pension. The full report and a summary can be found there.


Things can change in the future but as of now no one is even thinking about means testing it.

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