{"id":224571,"date":"2025-06-29T17:52:11","date_gmt":"2025-06-29T17:52:11","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/224571\/"},"modified":"2025-06-29T17:52:11","modified_gmt":"2025-06-29T17:52:11","slug":"labour-urged-to-introduce-means-testing-as-pensioner-bill-set-to-hit-181billion","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/224571\/","title":{"rendered":"Labour urged to introduce ‘means testing’ as pensioner bill set to hit \u00a3181billion"},"content":{"rendered":"

Government spending on pensioners is set to reach \u00a3181.8 billion by 2029\/30, according to new forecasts from the Office for Budget Responsibility (OBR).<\/p>\n

The rise reflects growing pressure on the UK\u2019s welfare system, particularly as the population ages and the cost of delivering age-related benefits continues to climb.<\/p>\n

The projections were released shortly after the Intergenerational Foundation called for Labour to introduce means-testing for state pension payments. The think tank argues that rising costs, combined with long-standing disparities in how different age groups are treated by the welfare system, demand urgent reform.<\/p>\n

Total welfare spending is expected to reach \u00a3373.4 billion by the end of the decade, an increase of \u00a360.4 billion from 2024\/25, or nearly a fifth. <\/p>\n

Of that, nearly half is already allocated to pensioner-related costs, which currently stand at \u00a3150.7 billion a year. This includes spending on the state pension, housing benefit, pension credit and winter fuel payments.<\/p>\n

By 2029\/30, those costs are forecast to rise to \u00a3181.8 billion, continuing to account for just under 49 per cent of the entire welfare budget.<\/p>\n

\"Couple<\/p>\n

The Intergenerational Foundation has pointed to what it describes as a stark imbalance in public spending growth across generations<\/p>\n

GETTY<\/p>\n

It is this scale of spending that has triggered renewed scrutiny from economists and policy experts. The Intergenerational Foundation has pointed to what it describes as a stark imbalance in public spending growth across generations. <\/p>\n

According to its research, real per-person spending on pensioners rose by 55 per cent between 2004\u201305 and 2023\u201324, compared with just a 20 per cent increase in spending on children over the same period.<\/p>\n

The think tank says the growing gap in spending between age groups could lead to long-term unfairness built into the welfare system. <\/p>\n

In its latest report, it calls on the Government to consider means-testing the state pension, meaning wealthier pensioners would get less or nothing. <\/p>\n

This would be a big shift away from the current system, where everyone who qualifies gets the same amount, regardless of income.<\/p>\n

Economists at the think tank are now pressing Chancellor Rachel Reeves to address these disparities through pension reform. Their report specifically recommends: “Reform the state pension by removing the triple lock and introducing modest means-testing.”<\/p>\n

Currently, all Britons who reach the official retirement age of 66 are entitled to receive the state pension and associated age-related benefits, regardless of their financial circumstances.<\/p>\n

The triple lock mechanism guarantees state pension payments rise annually by whichever is highest: inflation, average earnings or 2.5 per cent.<\/p>\n

\"DWP<\/p>\n

The triple lock mechanism guarantees state pension payments rise annually by whichever is highest: inflation, average earnings or 2.5 per cent<\/p>\n

PA<\/p>\n

The Institute for Fiscal Studies estimates this policy costs approximately \u00a311 billion per year compared to increasing pensions solely in line with inflation or earnings.<\/p>\n

This substantial cost has raised questions about the triple lock’s long-term sustainability. The IFS analysis suggests the mechanism significantly inflates state pension expenditure beyond what standard uprating methods would require.<\/p>\n

For the 2025-26 tax year, the full new state pension stands at \u00a3230.25 per week, equating to roughly \u00a3997.58 monthly or \u00a311,973 annually. <\/p>\n

Recipients must have 35 qualifying years of National Insurance contributions to receive the full amount, with a minimum of 10 years required for any state pension entitlement.<\/p>\n

\"Pensioner<\/p>\n

Means-testing would end the universal nature of state pension entitlement that has existed for generations<\/p>\n

GETTY<\/p>\n

The Intergenerational Foundation’s proposals would mark a fundamental shift in UK pension policy. Means-testing would end the universal nature of state pension entitlement that has existed for generations.<\/p>\n

Under current rules, pension eligibility depends solely on age and National Insurance contribution history, not personal wealth or income.<\/p>\n

Welfare spending as a proportion of GDP is forecast to fall slightly to 10.8 per cent, despite the absolute increase in expenditure. This indicates the economy is expected to grow at a faster rate than welfare costs.<\/p>\n","protected":false},"excerpt":{"rendered":"Government spending on pensioners is set to reach \u00a3181.8 billion by 2029\/30, according to new forecasts from the…\n","protected":false},"author":2,"featured_media":224572,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,1267,474,1232,2499,512,1786,16,15],"class_list":{"0":"post-224571","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-dwp","10":"tag-finance","11":"tag-money","12":"tag-personal-finance","13":"tag-sgg","14":"tag-state-pension","15":"tag-uk","16":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114767930776851341","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/224571","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=224571"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/224571\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/224572"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=224571"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=224571"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=224571"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}