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The Actuary The magazine of the Institute & Faculty of Actuaries

Means-tested allowances

My correspondence with Alison O’Connell, director of the Pensions Policy Institute, has revealed there seems to be a serious misunderstanding regarding the proposal to increase the basic state pension to eliminate means-tested state allowances. She has confirmed that, in her view, there is no question of eliminating the substantial current allowances for housing and council tax which currently provide such important help to millions of the retired. If this is the generally accepted view then the alternative, merely to modify pensions credit, does not eliminate what some regard as the degrading effects of means-testing.

This must be a personal value judgement. Personally I am in favour of payments according to need and there is growing evidence that many taxpayers under 30 would support that view.