The state pension could eventually become means-tested with the Labour Party in Government if a plan floated by a senior adviser to Sir Keir Starmer comes to fruition.
Sir Edward Troup, a former executive for HM Revenue and Customs (HMRC) who has been advising Shadow Chancellor Rachel Reeves, said action has to be taken on pensions.
Speaking to LBC, Sir Edward claims that pensioners must “contribute possibly more” than Britons of working age in some circumstances.
Despite officially being a benefit, the state pension is not means-tested like other payments from the Department for Work and Pensions (DWP), like Pension Credit.
When a benefit is means-tested, eligibility for it is dependent on how much has come in or from savings.
As it stands, Britons need to have 35 years of National Insurance contributions under their belt to get the full new state pension.
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Starmer and Reeves will be in control of the public purse
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In its call for the state pension to be means-tested, the HMRC official noted that pensioners are more likely to have accumulated sizable wealth than those who are younger.
“It’s a benefit which you’ve earned, but in a sense, we’ve earned all our benefits by paying tax and being members of society,” Sir Edward said.
“I don’t think it’s wrong, it’s an income and actually, you do pay tax on it as it happens.
“We can all think of the wealthy individuals in this country and say, well, do we think he or she should have a full state pension?”
The tax expert asserted that a “debate needs to be had” and means-tested could be a solution to address the issues surrounding public expenditure.
He explained: “It’s not easy and I don’t hold a particular view about how we deliver something which I think, should be delivered.
“My generation, the pensioners’ generation, if they’ve got income, if they’ve got means, should be contributing at least as much, and possibly more than those people who are working, bringing up families and are really contributing now to that country.'”
This morning, Sir Keir Starmer led the Labour to a historic win for the party during a General Election despite only winning 35 per cent of the vote.
Pensioners face an uncertain future
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During the campaign, Labour pledged to keep the triple lock on state pensions which sets the annual payment rate rise.
However, the party avoided committing to the “triple lock” which was the policy put forward by the Conservative Party.
If introduced, the tax-free allowances on pensions would rise in line with the triple lock but this is unlikely to be implemented.
GB News has contacted the Labour Party for comment.
