DWP Study Means_testing on Personal Account Pensions

DWP Study Means-testing on Personal Account Pensions

The DWP is to study Means-testing on Personal Account Pensions.

The Government has launched a study into the impact of means-testing on personal accounts, which are to be introduced in 2012.  The study will investigate how many people could end up worse off or no better off if they save in a personal account and will seek solutions to overcome the problem.  

The report is due to be published towards the end of the year.

Our view

This is all to do with Pension Credit and the Minimum Guarantee level of income that pensioners are given.  In short, if you save too much in a pension you may miss out on a means tested pension credit top up in retirement.  The study will do nothing more than close the issue off for debate whilst legislation passes.  

We suggest, the reality is the Government do not care and wish to reduce the amount it subsidises the less well off pensioners by forcing us all, by way of a compulsory pension contribution, to save in Personal Accounts.

Useful links:

Learn more about pension credit or compulsory personal accounts and related topics in the Pensions Adviser Channel

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