{"id":226885,"date":"2025-06-30T15:01:17","date_gmt":"2025-06-30T15:01:17","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/226885\/"},"modified":"2025-06-30T15:01:17","modified_gmt":"2025-06-30T15:01:17","slug":"rachel-reeves-urged-to-means-test-state-pension-personal-finance-finance","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/226885\/","title":{"rendered":"Rachel Reeves urged to ‘means test’ state pension | Personal Finance | Finance"},"content":{"rendered":"

Chancellor Rachel Reeves is facing growing pressure to impose means-testing on the State Pension<\/a> amid stark new forecasts showing the bill could soar to \u00a3181.8 billion by 2030.<\/p>\n

The sum, released by the Office for Budget Responsibility (OBR), reveals that nearly half of all welfare spending will be swallowed up by payments to pensioners by 2029\/30 – up from \u00a3150.7 billion this year.<\/p>\n

It has sparked calls from experts at the Intergenerational Foundation for a radical rethink of how the pension<\/a> system works, including scrapping the triple lock<\/a> and targeting payments to those most in need.<\/p>\n

In a warning to the Chancellor Rachel Reeves<\/a>, the think tank advised: “Reform the state pension<\/a> by removing the triple lock<\/a> and introducing modest means-testing.”<\/p>\n

Currently, anyone aged 66 or over is entitled to receive the state pension<\/a> – worth up to \u00a311,973 a year – regardless of income or wealth, so long as they have made the required National Insurance<\/a> contributions.<\/p>\n

But critics say this universal approach is becoming unsustainable, with Britain’s ageing population placing an ever-greater strain on the welfare budget.<\/p>\n

Overall, total welfare spending is forecast to hit \u00a3373.4 billion by the end of the decade – an increase of nearly a fifth, or \u00a360.4 billion, on current levels.<\/p>\n

Of that, just under 49% will go towards age-related benefits including the State Pension<\/a>, housing support, Pension Credit and winter fuel payments.<\/p>\n

The Intergenerational Foundation warns this could fuel a growing divide between age groups – and is urging Labour to act before the system becomes \u2018structurally unfair\u2019.<\/p>\n

The group\u2019s analysis shows that real per-person spending on pensioners surged by 55 per cent between 2004\/05 and 2023\/24 \u2014 while equivalent spending on children rose by just 20 per cent over the same period.<\/p>\n

Its latest report argues: \u201cRising costs, combined with long-standing disparities in how different age groups are treated by the welfare system, demand urgent reform.\u201d<\/p>\n

Under the proposed reforms, better-off retirees would receive a reduced State Pension<\/a> – or none at all – in what would mark one of the biggest shifts in British pension policy in decades.<\/p>\n

The triple lock<\/a> system, which guarantees the State Pension<\/a> rises each year in line with inflation, average earnings or 2.5 per cent (whichever is highest), has already come under fire for inflating costs.<\/p>\n

According to the respected Institute for Fiscal Studies (IFS), it now adds \u00a311 billion annually to government spending compared with linking increases to inflation or earnings alone.<\/p>\n

That cost is expected to rise further as inflation and wages grow – making the policy a lightning rod in the wider debate over how to fund retirement fairly.<\/p>\n

Despite the eye-watering headline figures, overall welfare spending as a share of the economy is forecast to dip slightly – from 11.1 per cent of GDP to 10.8 per cent – thanks to expected economic growth.<\/p>\n

But the sheer scale of pension-related spending is fuelling fears of a looming generational crunch, with younger taxpayers footing an increasingly large bill to fund benefits for those in later life.<\/p>\n

Any move to means-test the State Pension<\/a> would be politically explosive. It would mark the end of a universal benefit seen for decades as a bedrock of the postwar welfare state.<\/p>\n

So far, Labour has stopped short of committing to such reforms, with no confirmation from the Treasury on whether it will retain or ditch the triple lock<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Chancellor Rachel Reeves is facing growing pressure to impose means-testing on the State Pension amid stark new forecasts…\n","protected":false},"author":2,"featured_media":226886,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,2064,2074,2499,1786,89393,4537,4538,1787,16,15],"class_list":{"0":"post-226885","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-national-insurance","11":"tag-pension","12":"tag-personal-finance","13":"tag-state-pension","14":"tag-state-pension-2025","15":"tag-state-pension-latest","16":"tag-state-pension-news","17":"tag-triple-lock","18":"tag-uk","19":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114772920709182382","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/226885","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=226885"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/226885\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/226886"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=226885"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=226885"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=226885"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}