The state pension system is unfair. Reeves is right to change it

Rachel Reeves is cutting £1.4 billion of pensioner welfare payments with her winter fuel payment means-test. It sounds like a big number, but it’s not.

£152 billion is a big number. That’s the total value of welfare payments to pensioners in 2024/25. It’s more than we spend on the NHS. Taking the £1.4 billion annual cut into account, by 2027, that total bill will be around £166 billion.

Relative to the wider economy, pensioner benefits are currently around 5.4 per cent of GDP. That will rise next year to an all-time high of 5.6 per cent, before dropping back to 5.4 per cent in 2027/28 – unless policies like the triple lock drive up state pension costs more than forecast.

There are perfectly good reasons for spending so much money on pensioners.