Day 30 · Proposal 29 · Part XII · Policy 32
£18,000 State Pension Safety Net
A long-term minimum retirement-income floor, with state support assessed directly against private pension income.
This is a citizen-led proposal for examination and development. Detailed costings, actuarial modelling, transition planning and legislation would be required before implementation.
The core idea
Manifesto 1.1 proposes a long-term minimum retirement income of £18,000 a year.
Private pension income would be assessed first. Where that income falls below £18,000, the state would contribute the amount required to bring the person up to the proposed minimum floor.
Someone already receiving £18,000 or more from private pensions would receive no state contribution under this model. Income above the floor would not be reduced.
The objective is to prevent poverty in retirement while gradually shifting a greater share of retirement provision towards funded workplace pensions.
The core commitment
Everyone has a minimum retirement-income floor of £18,000 a year.
How the safety net would work
Income floor
The long-term target is a minimum total retirement income of £18,000 a year.
Private income assessed
Private pension income would be assessed before the state contribution is calculated.
The state fills the gap
Where private pension income is below £18,000, the state would supply the difference.
Income above the floor
Where private pension income is £18,000 or more, no state top-up would be paid.
Worked examples
The examples below show the proposed state contribution at different levels of assessed private pension income.
| Private pension income | State contribution | Total retirement income |
|---|---|---|
| £5,000 | £13,000 | £18,000 |
| £10,000 | £8,000 | £18,000 |
| £16,000 | £2,000 | £18,000 |
| £18,000 | £0 | £18,000 |
| £25,000 | £0 | £25,000 |
Proposed state top-up = the greater of £0 or (£18,000 − assessed private pension income).
Two linked pension reforms
This proposal is designed to operate alongside Proposal 28: Compulsory Workplace Pensions .
Proposal 28 would increase funded private pension provision throughout working life. Proposal 29 would provide a minimum retirement-income floor where that private provision remains insufficient.
Together, the policies seek to build greater personal provision through employment while ensuring that nobody falls below the proposed minimum income in retirement.
A long-term reform
Policy 32 proposes replacing the triple lock over the longer term with a defined retirement-income floor.
The transition timetable, uprating mechanism, treatment of existing pensioners and protections for people approaching retirement have not yet been settled.
These arrangements would require independent actuarial modelling, distributional analysis, parliamentary scrutiny and public consultation.
Safeguards and design risks
Protect the incentive to save
A pound-for-pound withdrawal of state support could weaken the financial reward from modest private saving. Alternative tapers should therefore be modelled and tested.
Deliver a fair transition
Protection would be required for existing pensioners and people who had little opportunity to build a workplace pension under the proposed new system.
Define assessable income
The policy must establish how annuities, pension drawdown, lump sums, inherited pensions and fluctuating investment returns would be treated.
Protect the floor from inflation
A transparent mechanism would be needed to review and uprate the £18,000 figure as prices and living costs change.
Provide reliable administration and appeals
Decisions must be clear, data must be accurate, and people must have accessible correction, appeal and hardship routes when an assessment is wrong.
Questions for scrutiny
- Should the £18,000 floor apply individually, or should household and couple income affect entitlement?
- Which forms of pension, investment, drawdown and lump-sum income should be included in the assessment?
- Would a pound-for-pound reduction in state support discourage saving, and would a gentler taper be fairer?
- How should the £18,000 floor be uprated if the triple lock is replaced?
- What protections should apply to existing pensioners and people approaching retirement?
- How should periods spent caring, disabled, unemployed or outside compulsory workplace saving affect entitlement?
- Should housing, disability-related or care costs affect the minimum income calculation?
- How should the proposal interact with tax, Pension Credit and other means-tested support?
- What would the transition cost, and when could increased workplace saving begin to reduce state expenditure?
The proposed direction
Build private pensions through work. Guarantee a minimum income floor in retirement.
Read. Question. Challenge. Improve.
Manifesto 1.1 is an evolving citizen-led project. Evidence, criticism and alternative proposals are invited.
Contribute to public scrutiny