With the Autumn Statement less than two months away, which will reveal Labour’s first budgetary plans since the general election, pensioners are being advised to brace themselves for significant changes.
An expert has suggested that the state pension could be on the chopping block for means-testing. Before the election, Rachel Reeves gave assurances that a means-tested state pension was not on the cards, but Sir Edward Troup, an ex-HMRC executive and senior advisor, stirred controversy.
He said: “If the public finances are in a bit of a state, perhaps wealthy pensioners should be giving up their full state pension“.
According to GB News, his comments have sparked debate over whether the government should consider cutting back on entitlements to save cash, potentially leading to stricter eligibility criteria or reduced payouts for those with workplace pensions or substantial wealth.
Former pensions minister Sir Steve Webb, now a partner at LCP, added fuel to the fire by describing the idea as “a nuclear option”.
He told the news outlet: “Many people already in retirement would feel very aggrieved if they had planned carefully, perhaps sacrificed income whilst in work to save for a better retirement, only to find out that the ‘rules of the game’ were changed after it was too late to do anything about it.”
He pointed out that it’s “very unlikely” to see a means-tested state pension, especially with potential transitional protections for those close to retirement age.
This would mean the government wouldn’t benefit from this change for years, yet he predicts there will still be some “further tough medicine” in the upcoming budget.
Andrew Gosselin, Chief Financial Strategist at The Calculator Site on GB News, highlighted a major concern with such a policy could be that it might “penalize people who have carefully planned for retirement”.
Moreover, today sees ministers deciding whether to proceed with Chancellor Rachel Reeves’ plan to tighten Winter Fuel Payments eligibility, aiming to address the £22billion deficit in public finances, a remnant of the Conservative legacy.
