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Is The State Pension A Benefit?

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barney15c | 20:07 Mon 04th Dec 2023 | News
54 Answers

I read a story in the news today about how 'potentially' the state pension 'could' be means tested in the future - the actual story was about the government putting through legislation to grant access to your bank details to combat fraud. One thought that came from the article was using it to means test people for benefits and state pensions. As income tax can be applied on a state pension then surely the state pension is not a benefit, but is being treated as one, what are other peoples take on this?



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Well, that's taught me something.  Thanks both.  I've still paid for it and don't want someone telling me I should be grateful!
23:01 Mon 04th Dec 2023

ladybirder: "It is definitely classed as a Benefit.  I argued it wasn't with an official at the Department of Works & Pensions and was proved wrong." - You are not "proved" wrong just because they use that label. They can call it what they like doesn't make it right. If the payment is based on years of contribution rather than just a free money payments then it's a pension. They even have 2 phrases, Pension and Pension benefit, the latter is a benefit the former is not. They can classify it how they like it is NOT a benefit. They class a reliant robin as a motorbike, doesn't mean it actually is one. Just Civil service labels for things that's all.

Problem #1:

“Whether a tax year is a QY or no is dependent upon earnings and NI credits or voluntary NI contributions where appropriate.”

Currently a person earning £15,000 pa will pay £320 in NI contributions.  A person earning ten times that amount £8,236 (or 26 times as much). But, all else being equal, each of them will receive exactly the same amount of State Pension.

Problem #2:

“We have paid for it, well I and OH have…”

Indeed, Jourdain. But many people haven’t. But they will receive the same as you (or probably more because they are likely to be eligible to received “Pension Credits.”

The State Pension is a farce. There is no relationship between contributions and benefits received (if anything it’s an inverse relationship – the less you pay in, the more you get out).

There needs to be a separation:

1. Those who have funded income for their retirement (i.e. paid pension contributions) who receive the scheme’s benefits in proportion to those contributions.

2. Those who have not and who receive retirement age State Benefits.  

"That is NOT a benefit a benefit is free money given to those that have not earned it. Only a complete idiot could confuse the two."

All the relevant legislation was written, debated and passed by complete idiots?

Question Author

I'm just wondering if the government will say , "Well you have a works pension and savings, you lived on that quite comfortably  before pension age, so do you really need a state pension on top to live?"

Jourdain I volunteered to pay into SERPS (State Enrolled Pension Scheme) for 18 years to get a better SP. I'm glad I did as it has made a good difference.

yeah it is a benefit

I thought everyone knew that . It wasnt once, but so what? The middle east was peaceful once.

You have to apply for it, and the paperwork clearly states that the benefit has been granted

and Problem #3 - national insurance is not predicated to state pension. I thought eveyone knew that

You do now

SERPS was the State Earnings-Related Pension Scheme and folk had the option to opt out rather than opt in.


If an employer had a company pension scheme, it had to be at least as good as SERPS and if employees had the option, they could choose that one rather than remain in SERPS.

The amount the company scheme paid had to be a minimum weekly amount, the Guaranteed Minimum Pension (GMP) and that was deducted from any weekly SERPS amount known as the Additional Pension (AP) paid with the retirement pension.

More often than not the company scheme was better than SERPS but folk could have some AP left still.


Question Author

In the Civil Service many employees were unaware they were contracted out of SERPS and had to make additional NI contributions to get the same state pension as those in SERPS.

SERPS related only to the Additional Pension, not the basic retirement pension.


You're not thinking on the reduced rate of NI that married women had the option to pay are you?


That class of NI didn't count toward entitlement to contributory benefits.

It should be an, untested for, benefit but anyone in work has contributed for years so it isn't just that. There is zero moral justification to means test it but when have authorities shown any moral behaviour ? A bit like the road fund licence which for ages has been stolen for use on other things allowing individuals of low moral standing to pretend drivers aren't paying for the roads and making out that everyone is. Maybe we should be looking to send politicians to Rwanda along with the illegal immigrants.

TCL I think what happened to me was I was advised to join SERPS as I was in my 50's and had only a small fixed amount due from an earlier scheme.  So I did and am so glad I took the advice as I get way more than the current basic SP amount which I believe is £203.85.  I did also work up until I was 68 which made a difference of course.

I think you might have changed your election from paying the reduced rate to the regular rate.


The reduced rate saved a wee bit money each week which was fine and dandy as long as  the women were in good health so weren't wanting to claim Sickness Benefit or IVB and years away from claiming retirement pension.




I was divorced TCL, would that have made a difference?

The option to pay the reduced rate would have ended when you were divorced and you would have had to pay the standard rate.

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