Had the link between the State retirement pension and earnings been retained, a single pensioner would be £28.30 per week better off today.  Although pensioners will be benefiting from the £200 winter fuel allowance and free TV licences, the State Retirement Pension is declining in value, pushing more and more elderly people on to means-tested benefits and causing resentment because those hwo have a small private pension or savings are scarcely better off.  As a response to this the Government's reaction has been to propose the introduction of further complexity, the pensioner credit which will eventually see 65% of pensioners subject to means testing.

The aim is to integrate tax and benefits in such a way as to give all citizens the best incentives to seek and engage in work without the poverty-trap of withdrawn benefits. At the same time the risks of exploitation, either of individuals or public funds is minimised and bureaucracy cut. A massive 10% of means-tested benefits paid out goes in administration compared to only 1% for the state pension. Child Benefit was the product of a similar process - converting child tax allowances, which benefited only those earning enough to pay tax, into a payment for all children.