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Is The State Pension A Benefit?

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barney15c | 19:07 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!
22:01 Mon 04th Dec 2023


Pensions, state or otherwise, are deferred income.


It's a pension paid for by years of contributions.

Grant access to my bank details...really?

Indeed. The word "benefit" when used in connection with pensions is not the same as when it is used in connection with (for example) Jobseekers' Allowance. Pension schemes are operated with contributions (from its members) and benefits paid out to them in retirement.

The problem with the State Pension scheme is large numbers of its recipients have not funded their benefits (either fully or not at all). This moves those recipients from the "benefits" of a pension scheme to the "benfits" provided by the State. provided by a traditional pen 

It's only loosely linked to contributions though canary.

You get the full state pension provided you paid enough NI contributions- but one recipient may have paid hundred times  more NI than the other, and the pension claimed over  a lifetime can far outweigh what some pay in NI. So to me it's a benefit. But I don't think it matters what you call it. Some could argue UC, for example, isn't really a benefit as you could have paid income tax and VAT.

There's often scare stories about means testing state pension but we know no government would ever try. They're even afraid of scrapping the £10 Xmas Bonus or ending he triple lock


Can someone answer my query about accessing bank accounts, please.

It's just conjecture I think, Tilly. And maybe some scaremongering. Why would the state need to look at your bank account when they know you receive state pension and it's not means tested? 

Here Tilly - it won't apply to pensions, only pension credit. But it is invidious.

The DWP are already aware when means tested benefit claimants have savings above the limits. I'm not sure how they get the information now but they do.


Tilly they already have read access to bank accounts. fact under money laundering and other laws they get regular reports from the banks anyway.

I have just read this:

Currently, if the DWP suspects someone of fraud they have to individually request their details from their bank. Under the new plans, banks will be forced to run monthly or even weekly checks to see if any “red flags” are picked up.

It seems no different to me than banks flagging up suspected money laundering

Section 20 of the Social Security Contributions and Benefits Act 1992 lists contributory benefits and it includes Category A and Category B Retirement Pensions.

Section 1(1) of the Pension Act 2014 states, "This Part creates a benefit called state pension."

Both of them are benefits.


The DWP knows all about interest paid on savings.  Access to bank accounts will show income from eBay, social media and the like

If someone has paid the requisite NI for the requisite time then it's a pension, paid for by the person and their employer. It may have another name in government admin but it's NOT a benefit in the sense that free money is given.

Free money? The broad brush is out again.

have a day off doug, benefits by their very nature are free money.

Of course they are dear, how silly of me.

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