Controversial call for state pension to be means-tested

Will means-testing the state pension make the system fairer and more affordable?

The International Monetary Fund (IMF) has called on the UK government to consider means-testing the state pension.

Such a move, it is claimed, would make the system fairer and more affordable, with the IMF noting that means-testing would ‘improve sustainability’ and ‘safeguard the most vulnerable’.

The same idea has previously been mooted (in May 2017) by the Organisation for Economic Cooperation and Development, in order to help address the strain that an ageing population is putting on the state pension. 

The IMF says: “Giving less pension to the wealthiest retirees could free up resources to finance general benefits. At the same time, similar redistribution objectives could be pursued by using the tax system (e.g. by increasing the tax burden relatively more on better-off pensioners), while preserving a simple and clear structure for state pensions.

“Means-testing for access to social benefits in old age could also be used to improve sustainability while safeguarding the most vulnerable. Alternatively, similar redistribution objectives could be pursued by using the tax system, while preserving a simple and clear structure for state pensions.”

The IMF also pointed out that the state pension age needs to rise, while the triple lock, which is an expensive policy, needs to be reformed.

At present, the UK state pension is based on National Insurance contributions rather than wealth. A move towards a means-tested system, based perhaps on an income threshold, would prove controversial, notes Steven Cameron, pensions director at Aegon.

A more likely course of action, avoiding the political risks attached to means-testing, is for further increases in the state pension age.

Last summer, the government outlined that the state pension age will rise to 68 between 2037 and 2039. This, though, was seven years earlier than originally planned. As a result, this change will hit everyone born between 6 April 1970 and 5 April 1978; the chances are that future governments will make further similar moves. 

Cameron says: “That there may be further increases to the state pension age is no surprise. With people in the UK living longer than ever before, the age from which state pension is paid needs to be kept under careful review to ensure it remains affordable long-term.

“Of all the suggested solutions put forward by the IMF, the most contentious is making state pensions means-tested, which could mean those with earnings or assets above a certain level no longer qualify, even if they have paid National Insurance throughout their working life.”

The government is acutely aware that it has a problem on its hands to sustain the state pension. Earlier this year, the Government’s Actuary Department (GAD) warned National Insurance contributions need to rise to fund it

The GAD calculated that a 5 per cent tax hike is required to sustain the state pension, which is being stretched by the UK’s ageing population. According to GAD, the fund will be exhausted by 2033 under the current NI rates.  

Cameron adds: “Unlike ‘funded’ private and workplace pensions, there is no fund built up to meet future state pension payments, so it’s those who are working who meet the costs of state pensions year on year through National Insurance contributions.

“The amount of state pension also clearly has a bearing on affordability going forward. Under the triple lock introduced in 2010, the state pension has been rising at the highest of earnings inflation, price inflation or 2.5% a year, adding significantly to its cost.”

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It's not fair keep putting pensions age up let some of the younger ones work and stop claiming dole money and let use pensions enjoy our retiement

So having paid all my…

So having paid all my contributions, been on holiday abroad only a handful of times, often camped for holidays in the U.K. and generally skrimped all my life I am to be penalised because my house is a high value asset. Maybe I should downsize and blow my money on iPhones, gadgets, meals out, flash cars etc etc

In reply to by Anonymous (not verified)

State pension means testing IMF view

I too think means testing would be unfair. The changes do not usually come into effect after many years

In reply to by Anonymous (not verified)


How about paying everybody that has paid national insurance for their whole working life a full state pension at the retirement age that they understood that they were to retire at? I'm sick and tired of this rubbish, somebody can choose not to work and retire from a life of being workshy and seamlessly go forward getting money for nothing. In any other situation, this would be a breach of contract but as usual, the lower paid workers are getting shafted.

No way

No way

State Pension Means Testing

There already IS means testing. It is called Pension Credit. DOH!

Means test

They should start with MPS pensions

Means Tested State Pension

Obviously there will be no point in anyone saving for their retirement then if the government go ahead with this plan. No other countries will be doing this with their pensions, yet another step where English people get ripped off at every stage of their lives.

Means tested pensions

Again those idle people who have never contributed to society except to have children and get paid for it will get a pension, and those of us who have paidone in for 40 years will get nothing from the government. Total rip off.

Means testing

Disgusting idea. Sensible people planned for their retitement over their working lives, paying into a pension scheme, ISA or savings account. Sometimes at a cost, not replacing the family car, holidays or social life. Now you want to cut their retirement pension to give it to those who didn't think it necessary to plan. Those who blew every penny they had on fast cars and holidays now reap the benefit of your careful planning. In addition should they need care they get it free, if I need it you will sell my house from under me. UK government was the very one who encouraged me and many other to take control of our retirements now to be told they want to give it to others. The will be those who genuinely need it but a lot more who were just frivolous and careless with money, too busy enjoying themselves to think about paying into a pension and I don't see why I should be told that I must now pay for them. ITS JUST NOT ON.

In reply to by Edith (not verified)

Another idiotic idea

I totally agree. Why save money, pay taxes, fefrine from holidays abroad, buy cheap clothing, stick to one car until it fails its mot just to support those who does not contribute for their own retirement? As it is it doesn’t matter how much one contributes to taxes and national insurance a year just to get the same amount as everyone else including those who have not contributed.

In reply to by Edith (not verified)

Pensions means testing

I agree with others, no way should we be means tested we sacrificed to ensure we would have enough in retirement. Get more people working and paying their dues same as we did.


I think it is shocking that people who have paid their contributions and saved up for a better quality of life when they retire are going to be penalised by not giving them a pension

In reply to by Margaret (not verified)

Pension means testing

I wish i hadn't bothered working now. It will deter people from working and saving.Anyone with savings will be forced to use them before getting the pension. That means they will not be able to pay for their care home when they need it. The government can either pay me £600 per month pension or pay my £600 per week care home. As usual, the government will end up paying out and losing.

Means tested pension

So you work and pay into the national insurance, therefore eligible for a pension and a person who has never worked and never paid national insurance can claim more pension, seriously having a bloody laugh at the working classes expense.

In reply to by Stephen Cowles (not verified)

Means tested pension

Considering their pay then it would mean no pension for all mps, I can not see those people giving up anything, you can bet that they will engineer a get out clause so that it does not include them

In reply to by Chris Fagan (not verified)


They already have ringfenced their pensions at 60 I believe

It's bad enough that I now…

It's bad enough that I now have to wait until I am 66 without means testing. If it includes my husband's pensions & house value I probably wouldn't get any which would put within the poverty levels ?

Sensible future

Need to create a sovereign wealth fund with N.Sea oil revenues, as we should have in the ‘70s

Total agreement

I agree with all of the previous comments. If you worked hard to plan and provide for old age you will be penalised! This is a disgrace in a 1st world country and should be fought all the way.

Total agreement

I agree with all of the previous comments. If you worked hard to plan and provide for old age you will be penalised! This is a disgrace in a 1st world country and should be fought all the way.


Why not start means testing on child benefit they must be plenty that don't need it but then theirs the self employed that pay minimum stamp they not all in struggling businesses there is a lot earning good money cut out all this waste first

Means tested pension

When will our government and its advisers stop hitting pensioners who have worked hard all their lives and paid into the system whilst also managing to save something for the future to enable them to enjoy their retirement.
If there is a shortfall in the benefits system it is down to all the people who despite being fit and healthy will not work and just keep having more children to get more money. These are the ones that should be hit and made to work and contribute like the rest of us.
Apart from the above we have to work longer and get poorer pensions than a lot of other European countries, Why.


People that have never worked for whatever reason disabled or mental health do not get big pension they get very little.


I have worked since i was 16 .will be 65 in april but have to wait until nov to get my state pension .I have had an extremely hard and demanding job within the services and think i deserve a full state pension ,so leave the workers who have contributed to the country alone absolutely disgusted with this latest idea of means testing ,the MPs won.t be happy with this either.


Why keep picking on the pensioners stop giving to the work shy and let the pensioners who have worked all there life have a happy retirement so be it cheers

Means tested pension

So what you are saying is those of us who have worked for 40+ years and can not get their state pension untill 66 may never get it because I have paid into a work's pension but those who have never worked a day in their lives will shame on any government that would pass this


Here we go again hit the workings classes work all your life and then add on a few more years before retiring Christ what next begging bowls when are the people going to stand up for our rights try to do this to the French or any other country in Europe and watch what happens anarchy reigns


Here we go again hit the workings classes work all your life and then add on a few more years before retiring Christ what next begging bowls when are the people going to stand up for our rights try to do this to the French or any other country in Europe and watch what happens anarchy reigns

Pension Reform

The pension system bears not any resemblance to the one brought in originally via the Welfare State to protect people in old age. There should be no means testing.
Some people have the resources to save others don't. If you paid in NI for 40 years and expected a pension you should get that pension. Not every person who'd be means tested is a scrounger. Not everyone who has pension issues is able to plan for a healthy retirement. There should be a basic income for all from pensions pro rata if you don't have enough NI years. These who didn't earn sufficient for a full pension should be means tested. Not acceptable to means test everyone else who paid in so that they'd have a pension at an age young enough to enjoy their retirement. We need Pension Reform for a much fairer system. Or don't take NI and let us make our own pension decisions. So many rugs pulled out from under our feet in the name of equality and life expectancy. All just money grabbing exercises in my view.

Stung again!

Absolutely shocking how we are being treated. Work all my life and they hike up pension age now this. We deserve the money we have put in over the years. We shouldnt have to worry about living in poverty in the latter part of our lives.

IMF - Pensions

This country's pensions are amongst the lowest in Europe, think the IMF should mind it's own business. God help the party who try to introduce such a scheme, they could look forward to a long term in opposition. I would love to have a look at the gold plated pensions employees of the IMF retire on, payed for by international governments, ie us!!

Rip off britain

Typical. Work from age 15 till 65 pay all your dues and then get told you are a burden and your money will go to the idle and the rest of those who have paid in very little or nothing. Daylight robbery by the government. Even dick turpin wore a mask.

In reply to by Dave turner (not verified)


I agree what as been said by all of you, but let's remember in our day there jobs, and those of us who were able to by a house, so be proud of what we have achieved, because in 10 - 20 years it will all be all over.


So two families in the life time, earn the same amount. One family Sensible saves as much as they can into their pension. The other family Knot pays as little as they can. So the solution suggested is the family Sensible give up some of their pension to the Knot family. Hardly an incentive by Government, and it is not equitable to those who try and save.

it's a mean test

why not means test food and other goods so those with more money pay more


I have worked all my life and plan for retirement. But now reading that the state pension will be means test this is crazy people who have worked all there lives being told you paid into NI but you will not get it until you are means tested it is disgraceful


I'm 67 years old, been working since I was 15. I receive state pension & a company pension that I paid into. I'm still working & paying tax. My state pension is reduced because of my company pension, which I pay tax on. You can't win.

State pensions

pensions in most case's have been earned, benefits for workshy have not, tell them there's will stop after so long on the gravy train if they're not in work.


Typical IMF but no doubt ir will get the support of the Tory Party but the fat casts will still get their share. I suppose those who are so deprived of the state pension will have ALL their national insurance contributions repaid to them with 44 years of compound interest ?

Public Sector and MP pensions

If they need more money for the state pension, how about stopping public sector and MP pensions and make them contribute to a SIPP like the rest of have to do now.

Mean pensions

Why the hell should you have your pension means tested when you have worked and paid in taxes and nat insurence nearly all your life its bad enough having to wait till age 66 why should we be robbed because we have worked hard and saved extra towards our retirement. Get the work shy into work and make them earn their keep instead of giving them hand outs all the time. Leave our pensions ALONE....

Mad at suggestion of means testing

Oh yes once again if you've worked all your life and now have to wait extra years to get your pension we'll means test it. I should have gone on benefits and been workshy and then I'd have been far far better off or I could have spent all my money on gadgets and holidays. This country does not reward hard working people and if Corban gets it the benefit class will be living in style.

State Pension

‘One law for one and one for another’ springs to mind! How about meanstesting IMF personal, MPs, Government Ministers and Advisers, House of Lords, BBC Execs, CEO’s before they are able to claim any pension, bonuses, perks and expenses etc. instead


The IMF needs to shut up . They clearly have no idea how hard that stupid idea would make peoples final years . It's pathetic. If you pay in then you should get it . No ifs no buts

Means testing state pensions

I think whichever party suggests this in their manifesto will lose the next general election.

Just a joke

How am I supposed to be a competitive plasterer at 68 I'll have been doing it for 48 years I've been doing 30 and I'm half crippled already,never had a day out of work always paid what's due for what so I can die with no retirement and some lazy scum will have it in benifits and smoke or drink my retirement fund ....well done Britain pile of crap makes me so angry

Sate Pension

The UK state pension is the lowest in the OECD, and needs to be at least quadrupled to bring it nearer to the pensions paid in Spain, Portugal and Germany.
We keep being told that UK is the 5th or 6th largest economy in the world, so should start a sovereign wealth fund, as Thatcher was told do back in the 1970s. That useless woman was one of out most disastrous Prime Ministers, among many others.

Keep it Simple, Stupid

No problem with the idea of trying to re-balance pensioners' income but lets do the simpler - and probably fairer - thing and increase Income Tax and NI while keeping the state pension (more or less) uniform. In particular, let's increase the 2% NI rate, currently paid on earnings over £46,350 p.a., to the 12% paid by the rest of us.


I suggest a complete revamp of the tax system. Scrap NICs and bring in a wealth tax. There would be no need for means testing as the level of the wealth tax could be set to cover the full cost of pensions.

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