The State Pension increases at the start of every new tax year on April 6 and the amount it goes up is based on three factors, known as the ‘triple lock’.
The state pension is reportedly at a “tipping point” – with means testing seen as the ‘ONLY viable option’ to secure its future. The State Pension increases at the start of every new tax year on April 6 and the amount it goes up is based on three factors, known as the ‘triple lock’.
Edmund Greaves, editor of Mouthy Money said: “Significant numbers of pensioners in receipt of the state pension simply do not need it. According to the ONS’s latest household wealth survey, 49 per cent of over-65s in the UK have a net worth of at least £500,000, and 22 per cent have over £1 million.”
He added: “It has never been brave enough to consider means testing. That is now the only viable option to prevent the burden on taxpayers from spiralling out of control.”
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Greaves also suggests that the true wealth of older households may be even higher than official figures show, warning that government data could be underestimating pensioner wealth by “trillions of pounds.”
“Former Governments have taken steps to make the state pension bill cheaper,” he added. “But they’ve consistently avoided the question of means testing,” Greaves said. “That’s the conversation we need to start having.”
Greaves points out that the state pension is approaching a historic “inflection point”. Mr Greaves explains: “From next year, the Government could begin clawing back a portion of state pension payments through the income tax system.”
He added: “The poorest pensioners with no access to financial advice now face being taxed on their state pension income. Meanwhile, well-off retirees can simply move money around to avoid additional tax liabilities.”
Men born on or after April 6, 1951, and women born on or after April 6, 1953, are eligible to claim the new State Pension once you reach State Pension age, which is currently 66.
People claiming this pension will also see their payments increase by 4.1% from April, with the full rate rising from £221.20 per week to £230.25.
Over the course of a year this amounts to an extra £470 in your pension pot, if you get the full rate. It means those on the full new rate will receive £11,973 in pension payments across a full year from April 6, 2025.
