Means testing pensioner benefits could punish savers

By Dr Ros Altmann , Tuesday 10 July 2012

Pensions expert Dr Ros Altmann believes that if you start means testing pensioner benefits, many of those who need help will not get it, as they won't claim.

Means-testing could adversely affect savers

"It will cost huge sums in administration and you will be penalising those who have saved," says Dr Altmann. "The reason we have all these pensioner benefits is because our state pension is so low for so many people. Nearly half of pensioners are already eligible for means-testing, although many won't claim and around half have incomes of less than £10,000 a year.

"The current pension system needs reform and we need less means-testing for older people, not more. Means-testing is complex, inefficient and costly in terms of administration and penalises those who have saved, whereas universal benefits for pensioners ensure all those who need them do receive what they should.

"Our research also shows that 87% of pensioners feel their bus passes are vitally important and 90% said the same about their winter fuel allowance. Also, more generally, two thirds of all those over 50 think that retaining universal pensioner benefits is a fair policy.

"Of course, in theory, it makes little sense to pay money to wealthy pensioners who do not really need it, but then will the next step be to say that they don't need the rest of their state pension either? It would make far more sense to tax pensioner benefits, or even to increase the age at which eligibility starts, or to only allow free travel at off-peak times, but we urge the Government not to listen to the calls for more means-testing, which will put people off saving for retirement and will also leave many poorer pensioners without the help they require."

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Anthony Holme

Posted: Friday 13 July 2012

If the government want to save money on Pensioner benefits to which we have contributed in the past when younger for others and continue to do so now why not just scale them back a bit, for example revert free bus passes to local area.
David

Posted: Friday 13 July 2012

I have already made my own savings to compensate for any more robbery by the condems. Have terminated four magazine subs, domain name plus other trivia that I do not need, result £100 plus a month, far more than than the rich boys will be stealing from me.
anthony vose

Posted: Thursday 12 July 2012

Sorry Dr Ros,but you are wrong. Your arguements are fundamentally flawed,as in the one breath you wish to raise universal benefits ( which tends to favour the better off),whilst at the same time conceding that wealthy pensioners do not need these handouts,and then whilst reiecting means testing,suggest taxation testing. Is that not also means testing and costly to administer? Surely the answer must be to agree a level off income as a cut off point? tax /pension credit level a start maybe?
Jackie

Posted: Thursday 12 July 2012

I don't drive so have to use buses. I find there are many of us in this position, and bus fares are expensive nowadays. If bus passes were stopped, I believe this would be a very silly idea and a false economy. Lots of pensioners are extremely useful people helping one another, families and friends,assisting with fund raising and doing voluntary work. Much of this would have to stop if no bus pass. Also, I think a lot of people would not be so healthy if they weren't able to travel about so much
patrick hennessy

Posted: Thursday 12 July 2012

how come immigrants legal or otherwise are given £250 a week and their partners £125 on entering this country along with other benefits while we the the older generation of this country who has paid there dues during our working life get £105 a week and the wife £94? [if they are lucky]
Sheelagh Ainsworth

Posted: Thursday 12 July 2012

Has anyone mentioned an income ceiling for pensioners being means-tested? On my pensions I do not qualify for any benefits. Surely they will not just means test all who have no claimable benefits!
Keith Marsh

Posted: Thursday 12 July 2012

It seems a little specious of Dr Altmann to comment on means testing since, from 2015 (perhaps), present pensioners such as myself will HAVE no choice but to enter the 'means test'! This in an effort to keep up with 'new' pensioners who are likely to be paid a guaranteed £140 per week or more and WITHOUT any testing at all! As for bus passes, of course they're important, but 'out of area'?, surely it'd be more sensible to keep the pass but pay a flat fare of £1.00 PER DAY for out of area use.
Terry Pinchin

Posted: Thursday 12 July 2012

Our two daughters are a community nurse and school teacher respectively, finding it very hard to survive financially in the expensive London and South-East, particularly the high cost of somewhere to live - with the added cost of high utility bills . What sense does it make that many of our wealthy retired friends travel around London free on the underground and receive fuel benefit? I include myself in that but I give the equivalent to charity.
David Green

Posted: Wednesday 11 July 2012

It seems unfair, and even cruel, to deny the bus pass to working people who have for many years been paying for it through their taxes. The government should instead be focussed on clawing back the £ tens of billions in tax avoidance that goes on every year. The simple way to administer benefits is to pay them to everyone who claims, then manage the total income of individuals through taxation. This is equitable and upholds the dignity of the individual.
Mr RW DENNIS

Posted: Tuesday 10 July 2012

I cannot understand why presenters keep on about stopping the bus pass. If wealthy people don't claim it there is no cost and if wealthy people don't use it there is no cost. Lets face it, how many wealthy people will stand waiting for a bus?. If it is taken away, more people will use their cars, then what about global warming? In reallity, it is a subsidy to bus companies to help keep buses on the road, a jolly good thing too, I say. The bus companies should be lobying to keep it.