Prime Minister Andy Burnham is being urged to introduce a “pensions sacrifice” scheme that would allow wealthy pensioners to voluntarily give up their state pension for three or more years in return for an honour such as an OBE. The proposal comes from Compass, a pressure group backed by ally Neal Lawson, as part of a report containing 100 recommendations for Mr Burnham's first 100 days in office.
The scheme is designed to alleviate growing pressure on public finances and address Britain's mounting pension crisis, which is driven by an ageing population and the rising costs of the triple lock guarantee. Under the plan, pensioners who opt out would forgo their state pension payments from the Department for Work and Pensions (DWP).
Pensions Sacrifice Proposal Details
Compass argues that the prime minister should “allow rich, well-off pensioners to opt out of their state pension for 3+ years in return for a 'Pensions Sacrifice' OBE, as a reward for donating funds to education or another popular cause.” The policy would be “modelled on the altruism of groups like Patriotic Millionaires,” which describes itself as a “nonpartisan organisation of high-net-worth individuals who advocate for higher taxes on the wealthy, better wages for workers, and a reduction in economic inequality,” the pressure group adds.
Patriotic Millionaires states its mission is to “leverage the voice of wealth to build a more just, stable, and inclusive economy and to accelerate the end of extreme wealth.” The proposal is among 100 recommendations in Compass's report aimed at guiding Mr Burnham's first 100 days in office.
Property Tax Reforms Also Urged
In addition to the pension opt-out, Compass urges Mr Burnham to launch a “full independent review” of both council tax and stamp duty within his first 100 days. The goal is to “replace both with a fairer property tax based on current values, protecting those who cannot pay, cutting bills for most households and unlocking a more mobile housing market.”
The report describes the property taxes as “Britain’s most unfair and economically damaging taxes,” noting that council tax is still based on 1991 property values, while stamp duty “penalises people for moving, downsizing, upsizing or relocating for work.” The Institute for Fiscal Studies has also argued that council tax is “not fit for purpose,” calling it “increasingly out of date and arbitrary, and highly regressive with respect to property values.”
The proposals come as the government faces increasing pressure to manage public finances amid an ageing population and the escalating costs of the state pension triple lock. If implemented, the pensions sacrifice could reduce DWP spending, but it remains unclear how many wealthy pensioners would take up the offer.
