THE UK state pension should be means tested and wealthy retirees should LOSE their entitlement to it completely, a top economic body has demanded.
The Organisation for Economic Cooperation and Development believes “rich” Britons – millions of whom have paid into the system through National Insurance contributions for decades – should lose their pension entitlement entirely.
It said stopping state pensions for Britain’s richest 10 per cent of retirees would “free up resources” to pay more money, either to poorer pensioners or people on other benefits.
Mark Pearson from the OECD, said the UK, like many other countries, is under pressure from an ageing society: “Faced with these pressures, are you going to ask people of working age to pay more, or people to work longer before they can claim their pension?
“Another way to ensure an adequate pension is to think about whether the pension should only be paid to those who really need it, to ease the tyranny of the maths.
“Giving less [pension] to the people at the top would free up resources to increase general benefits.”
Mr Pearson also said the controversial pension triple lock SHOULD be scrapped, as it put one group in society – pensioners – ahead of everyone else.
Michael Johnson, a research fellow at the Centre for Policy Studies, agreed that the state pension should become means tested.
He said: “Sooner or later we are going to have to confront the state pension, and ask ourselves what is it for?
“Is it a benefit paid to those in need, or is it a contractual obligation of the state, established through National Insurance Contributions? The Treasury’s view is that it is a benefit.
“Essentially, the most wealthy in society should not receive any state pension at all.
“They do not need it – particularly those with defined benefit pensions, which the next generation will not enjoy.”
Wealthy pensioners do not need the state pension – particularly those with defined benefit schemes
He said: “It sounds like a pretty bad idea. If you want to take money away from the rich, the tax system is usually a better place to go.
“It has the potential to be quite socially divisive and one of the essential and valuable elements of the state pension is the reasonably clear and simple entitlement structure – if you pay your national insurance, you will qualify for it.”
Other campaigners said means testing the state pension could increase tensions between generations, as future pensioners would receive far less than current over 65s.
Others said it was the “thin end of the wedge” for universal benefits, questioning whether the NHS – for example – would still remain accessible for all if the state pension became means tested.
Theresa May is already facing a backlash from five million British pensioners after the new annual state pension of £8,296, introduced last year, was proven to represent 16 per cent of the average national salary, compared to the OECD average of 20.5 per cent.
Despite the woeful treatment of the country’s older generation, successive UK governments have gone after pensioners, changing the age at which they are allowed to receive their pension without adequate warning, making them pay more up front and at a faster rate than any other European Union nation.
Last week pensions campaigner June Slater revealed she is to tackle the Prime Minister head on over the pensions issue and warned that millions of men and women all over the country are mobilising to fight Government changes.
“We will be watching the Conservative manifesto closely,” said Mrs Slater in a statement to Express.co.uk.
“What has happened to our pensions is a national scandal and quite possibly illegal, so if the Government want a battle I would say bring it on!
“Some of the real life struggles that people are facing are completely ignored by the Government and since Theresa May is 60 herself, people are hoping for change.
“If the Government doesn’t change course they are likely to offend just about every voter in the country, and that would not be good before a general election.”
Prime Minister Mrs May has so far refused to guarantee the pensions “triple-lock”, which ensures that pensions rise in line with inflation, average earnings, or 2.5%, whichever is higher.
Job Harrison is the founder and owner of Shzboxtoday. He has been spending tireless time studying alternative medicine, researching on quality life and building blogs for SMEs and online publishers.