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One in four Brits should lose their state pension, think tank suggests

A new recommendation made by a think tank would see 25 per cent of pensioners miss out on the state pension

Abigail Donoghue

Abigail Donoghue

— 2 min read
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One in four Brits should lose their state pension, think tank suggests

THINK TANK PROPOSAL: The report looks at pensioners cash assets, property and pension value (Image by Westend61/Getty Images)

Reporting by Josh Sandiford

A new report, put forward by a centre-right think tank, has called for state pensions to be taken away from 25 per cent of pensioners receiving them.

The Adam Smith Institute (ASI) has based the report findings on the amount of money that OAPs have when they get to state pension age. It has said that people who are retiring with assets that are worth over £1million should not get a state pension.

Conducted by the Intergenerational Foundation, the 2022 analysis showed that one in found pensioners are millionaires. BirminghamLive reports that this was calculated by looking at cash assets as well as the value of their property and pensions.

Read more: Who is eligible for upcoming 2023 cost of living payments worth up to £1,350

However, the ASI is arguing that these people do not need to receive the state pension. It makes the case that the money saved from cutting these people off can be used to help the younger generations and generations who are less well off.

ASI also claims that a number of reforms could reduce inequality between generations. Authors of the ASI report say: "The triple lock [pension scheme] is unfit for purpose.

"This ratchet spending is becoming unsustainable and unjustifiable, and exposes the Government to large state pension pay outs which outstrip the growth of the economy that underwrites them. An increasingly large divide has opened up in British society between generations in which the young lose out, while the elderly benefit.

"The state pension is effectively a universal benefit, funded out of general taxation and applied to almost all pensioners. Most other benefits are targeted towards those who need it the most and adjusted as those needs fluctuate."

There was a lot of controversy surrounding the triple lock, a pension scheme that sees the value of the state pension rise every April, last year as the Government fell into disarray. After lots of speculation it was eventually confirmed the lock would stay in place and in 2023 if will increase by 10.1 per cent in line with inflation.

The ASI has hit out against this with the report arguing that current rules should be axed as they are only making already wealthy pensioners more wealthy while workers see their incomes fall. Quoting data from the Joseph Rowntree Foundation, the ASI said the triple-lock mechanism had seen the average pensioner's net income increase by £510 a year since 2010.

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