Means-testing, if it was to be introduced under the Labour Party, would be a “dramatic” shake-up for people born before 1959, economists have warned.
State pensioners warned over DWP change which could ‘dramatically’ payment rates
A state pension rule change could “dramatically” alter older people’s payments, it has been warned. Means-testing, if it was to be introduced under the Labour Party, would be a “dramatic” shake-up for people born before 1959, economists have warned.
The Institute of Fiscal Studies (IFS) warned older people over the “challenges and trade-off” they can expect in their update via the Oxford Review of Economic Policy.
Jonathan Cribb, Carl Emmerson and Heidi Karjalainen warned that means-testing the rates “would dramatically alter people’s saving incentives during working life”. “Means-testing of the state pension would likely reduce the number of people participating in and the amounts saved into private pension schemes,” the IFS economists wrote.
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The experts also noted it “would make automatic enrolment into workplace pensions a harder policy to justify”. Kemi Badenoch has said the Conservative Party will consider means-testing the pensions triple lock.
The Tory leader said her party would “look at means-testing” the system which guarantees that the state pension rises in line with average earnings, inflation or 2.5% – whichever is highest.
The Conservatives have long championed the triple lock – introduced by former chancellor George Osborne during the coalition government – but some senior Conservatives have recently hinted that it might not be sustainable in the long term.
Speaking to LBC, Ms Badenoch said there were reasons to review the policy because “we don’t have a system that knows who should get what”.
“We’re going to look at means-testing,” she said. “Means-testing is something which we don’t do properly here. I’m someone who always said, for example, that millionaires should not be getting the winter fuel payment.”
She went on to say that although the the triple lock was a Conservative policy after she took over as leader, adding: “We’ve got to give something to the next generation”.