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.”
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Wealthy pensioners do not need the state pension – particularly those with defined benefit schemes
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.”