{"id":229279,"date":"2025-07-01T12:27:09","date_gmt":"2025-07-01T12:27:09","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/229279\/"},"modified":"2025-07-01T12:27:09","modified_gmt":"2025-07-01T12:27:09","slug":"state-pension-is-not-an-entitlement-labour-free-to-means-test-yours-personal-finance-finance","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/229279\/","title":{"rendered":"State pension is NOT an entitlement \u2013 Labour free to means test YOURS | Personal Finance | Finance"},"content":{"rendered":"

In March, I delivered some unwelcome news: the state pension isn\u2019t an entitlement. It\u2019s a state benefit, just like any other<\/a>.<\/p>\n

Many readers weren\u2019t happy. They wrote in, insisting the pension is theirs by right after decades of National Insurance contributions. And all I could say was this: I only wish it was.<\/p>\n

I\u2019m not the one deciding this so please, don’t shoot the messenger. The Department for Work and Pensions (DWP<\/a>) has made it clear in black and white, legally defining the state pension<\/a> as a benefit. Why? To \u201croot it within the social security framework”.<\/p>\n

The DWP<\/a> isn\u2019t just playing with words. That changes everything.<\/p>\n

UK finances are in a mess as Chancellor Rachel Reeves<\/a> runs out of fiscal headroom. Now she’s facing demands to means test the state pension to keep it affordable<\/a>.<\/p>\n

And benefits can be means tested. A whole heap of them already are, including Universal Credit, Pension Credit, Housing Benefit, Council Tax Support and Income Support. Which means the state pension<\/a> can be too.<\/p>\n

If you refuse to believe the state pension<\/a> is a benefit, you\u2019re not alone.<\/p>\n

New research from retirement specialist Just Group, published today, shows a staggering 94% of state pensioners believe the pension is an entitlement. And frankly, why wouldn\u2019t they?<\/p>\n

I\u2019d think that too, if I wasn\u2019t in this job. I\u2019d be just as shocked and outraged as everyone else. Instead, I\u2019m just outraged \u2013 and worried.<\/p>\n

Reeves is scrambling to find savings. So far she’s targeted the winter fuel payment<\/a>, Cash ISA allowance and Personal Independence Payment.<\/p>\n

From March 2027, she plans to slap inheritance tax on unused pensions as well. Every single one of these changes will hit retirees hard.<\/p>\n

Here’s another common misapprehension.<\/p>\n

Just Group’s research shows that most retirees still believe the state pension<\/a> is affordable long term. Again, the reality is more complicated.<\/p>\n

Stephen Lowe, group communications director at Just Group, says that rising longevity and falling birth rates mean a quarter of the UK\u2019s population will be over 65 by 2050.<\/p>\n

Over time, a shrinking number of workers will have to fund a growing number of pensioners.<\/p>\n

Remember, there is no pot of cash paying for the state pension<\/a>. It\u2019s funded purely by taxing those in work. If that sounds like a Ponzi scheme, you\u2019re not the first to think that.<\/p>\n

Lowe says Reeves has four options to keep the state pension<\/a> affordable: increase taxes, raise the retirement age, reduce the amount paid, or means test it.<\/p>\n

Every single one is politically toxic, he says \u2013 and he\u2019s right.<\/p>\n

But one or a combination will have to happen. The Tories are already looking at means testing<\/a>.<\/p>\n

The state pension<\/a> review is due within 18 months, when all options must be on the table. Lowe\u2019s advice? Build private pensions and savings now to buffer against possible cuts.<\/p>\n

But that’s impossible for those who’ve already retired.<\/p>\n

If means testing becomes the norm, the principle of universal support for pensioners will be eroded, potentially leaving millions worse off.<\/p>\n

Means testing is complex, which is why most governments avoid it. Yet Reeves is now means testing the winter fuel payment<\/a>. Some may see that as a worrying precedent.<\/p>\n

Personally, I think means testing the state pension<\/a> would be a step too far for hard-pressed Brits (although the Aussies managed it).<\/p>\n

Others differ. With the state pension<\/a> defined as a benefit, not an entitlement, Labour has the power to reshape it however it sees fit.<\/p>\n","protected":false},"excerpt":{"rendered":"In March, I delivered some unwelcome news: the state pension isn\u2019t an entitlement. It\u2019s a state benefit, just…\n","protected":false},"author":2,"featured_media":229280,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,4],"tags":[528,90240,90238,12,1786,16,90239,15,2377],"class_list":{"0":"post-229279","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uk","8":"category-united-kingdom","9":"tag-labour-party","10":"tag-labour-policy","11":"tag-means-testing","12":"tag-news","13":"tag-state-pension","14":"tag-uk","15":"tag-uk-finances","16":"tag-united-kingdom","17":"tag-universal-credit"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114777977174787444","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/229279","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=229279"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/229279\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/229280"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=229279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=229279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=229279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}