Labour plot to make retirees ‘give up their full state pension’ to fund Starmer’s splurge | Personal Finance | Finance

Many in the Labour Party see the older generation – or boomers as they call them – as a gigantic cash cow just waiting to be milked. Now a new suggestion will send shockwaves among 12 million retirees who receive the state pension. Labour wants to tax it.

The new government is debating means testing the state pension, so that retirees could get a lower sum if Starmer and Reeves decide they are earning too much.

This would completely undermine the structure of the state pension, where how much you get purely depends on how many national insurance contributions you made during your working lifetime.

It means someone who qualifies for the full new or basic state pension may not receive it in practice.

This would be a radical change that would infuriate those caught. Unsurprisingly, the Labour Party didn’t breathe a word about it during the election campaign.

This isn’t official party policy yet, but it could be.

A newly appointed party advisor, personally selected by Reeves, has just floated the idea in an interview on LBC.

My guess is that he’s testing the waters. I can tell him the response now. Most pensioners would want to see this proposal drowned at birth.

The suggestion came from Sir Edward Troup, a former head of HMRC. In the 1990s, he advised Tory chancellor Kenneth Clarke. Today, he has seamlessly shifted to advising Labour.

He told LBC that pensioners must “contribute possibly more” than Britons of working age in some circumstances.

And he knows how it should be done: “If the public finances are in a bit of a state, perhaps wealthy pensioners should be giving up their full state pension.”

Oxford-educated Sir Edward, 69, is a boomer himself. He regularly brings that up in interviews, every time he demands the elderly pay more.

In the past, he has suggested the over-75s give up their free TV licences, which he has called “ridiculous”.

He’s a huge fan on inheritance tax, tweeting to celebrate the fact that we’re paying higher levels of IHT than ever before.

And now he’s gunning for the state pension.

Sir Edward knows means testing the state pension would be hugely controversial, but thinks a “debate needs to be had”.

He has already drawn his own conclusion: means testing “should be delivered”.

Many think of the state pension as an entitlement, but as I’ve pointed out before, the government doesn’t see it that way.

Ministers see it as a benefit. No debate.

Plenty of other benefits are already means tested, so that people with higher earnings and savings get less.

That principle could soon apply to the state pension.

Sir Edward said: ”It’s a benefit which you’ve earned, but in a sense, we’ve earned all our benefits by paying tax and being members of society.”

He is personally comfortable with means testing the state pension. “I don’t think it’s wrong, it’s an income and actually, you do pay tax on it as it happens.”

His final suggestion is chilling. He suggests pensioners no longer do their bit.

Sir Edward said: “The pensioners’ generation, if they’ve got income, if they’ve got means, should be contributing at least as much, and possibly more than those people who are working, bringing up families and are really contributing now to that country.”

If Starmer and Reeves listen to their new adviser, pensioners could soon be contributing a lot more. Straight from their state pension.