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A Means Tested State Pension?
The LibDem conference concluded with Nick Clegg’s speech. You may have seen him on the news last night talking about cutting some of the free benefits to rich pensioners. He said “it is difficult to explain why Alan Sugar’s free bus pass should be protected when housing benefit is being cut”. Now I don’t want to get too political, but I doubt that Alan Sugar uses the bus and if he has been sent a free pass, I suspect it is in the bin and never been used (wild speculation on my part).
Alan Sugar’s Bus Pass
One would have thought it would be wiser to ask people to apply – hang on a moment, according to the DirectGov website you only get a free bus pass when you apply for one and the same is true for the London freedom pass. So I very much doubt that Lord Sugar has ever applied, which begs the question what on earth does Mr Clegg mean? Perhaps he is suggesting that there should be no free bus passes? let’s face it, anyone with a car is less likely to apply and they are only available to people with disabilities or of State pension age with modest to low incomes. I’ll take a wild guess that Mr Clegg does not wish to alienate these groups.
Winter Fuel Allowance
So what of the Winter fuel allowance? to which he also referred well this is paid to households that are in receipt of a State pension. It isn’t really claimed, it’s paid as a bit extra, with a couple of exceptions – those claiming child benefit, council tax benefit or housing benefit all need to claim it. It’s worth £100-£300 dependant upon age and the number of people that you live with.
Reading between the lines
I’m therefore perplexed at what he is really meaning. It occurs to me that this is merely a warming up of a notion that may gain momentum. The notion being that some people are wealthy enough not to need State support or benefits. If I might suggest this would possibly include the State Pension, which is probably the only “benefit” that most “wealthy” retired people could receive. There is probably some mileage in this, after all a similar thing has happened to child benefit. However, if this were to become practice, it would mean that the State Pension would become means-tested, which if the case begs the question of why pay national insurance? and where is the line drawn? Whilst I’m not wishing to stir the pot (well, maybe a little) I suspect that Mr Clegg has inadvertently indicated the way in which his or the Coalition Government’s thinking may be going. Any thoughts? How about those with final salary pensions like the NHS paying a pension of over £35,000 a year? how much “guaranteed” income do you think might render you ineligible for a State Pension if it became means-tested?