Speaking on LBC Radio last week, Badenoch, the leader of the Conservative Party, said the UK had a poor record in prioritising assistance to those who need it the most.
Under the arrangement, the state pension goes up each year by either 2.5 per cent, inflation, or earnings growth – whichever is the highest figure.
Here, we take a look at how it could work in practice and the hurdles politicians and pensioners could come across.
She added that “serious thinking” was required to address the financial impact of more Government spending “on later life”.
But pressed on whether her party would really look at the triple lock, she then added: “No, we are going to look at means-testing.
What has Labour said on the matter?
Asked on Friday whether the state pension triple lock was unaffordable, Sir Keir Starmer’s spokesperson refused to rule out potential plans to means-test.
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Read MoreIn all likelihood, means testing would mean that your income would be taken into account, to some extent, when calculating your state pension.
He explained: “One way could be a very limited means-test, applying only to those on the very highest incomes.
“There would also be a suspicion that a threshold which started high would gradually be extended, and this would increase the political barrier to change.”
By law, their employer then has to make contributions of at least 3 per cent of their salary, with the employee adding 5 per cent.
If the Government choose to introduce a “much more extensive means-test affecting large numbers of retirees”, this could lead to more people opting out of auto-enrolment.
“In doing so, they would be throwing away their employer contribution to their pension, and we would end up with a system where far more people were largely or wholly dependent on the state in retirement.”
What do experts think?
He explained: “Even if you didn’t qualify for a full state pension at retirement because of your private savings, it would be very tempting to run down your savings as quickly as possible so as to increase your state pension.
He said another problem that could arise could be undermining the concept of NI, adding: “NI is one of the more popular taxes, partly because people feel they are getting something back for it.
Jason Hollands, managing director of Evelyn Partners, said this will “likely prove to be a Westminster storm in a teacup”.
He said: “Were any party to propose means-testing access to the state pension, such a move would be electoral suicide in a country with an ageing population and, were such a measure ever to be introduced – which I doubt – it would need to be phased in gradually after many, many years, so that people have the time to make alternative provision.”
Craig Rickman, personal finance expert at interactive investor, said if introduced, he doesn’t think it would be very popular.
“Means-testing the state pension is something the Government could do, but the system wouldn’t be simple and cheap to implement.
“The mechanics would be far more complex and costly to set up and monitor than the one used for assessing winter fuel allowance entitlement.”
How do other means-testing systems around the world work?
A handful of countries around the world means-test the state pension, including Australia.
While the UK’s system is based on a pensioner’s national insurance (NI) record – with 35 years of payments or credits, through claiming certain benefits, needed to get the full amount – there is no equivalent in Australia, with the pension paid out by the state being a means-tested benefit awarded subject to tests on income and assets.
The “age pension” in Australia is reduced if yearly income from other sources is over a threshold. The fortnightly thresholds are AUS$212 (£107) for a single pensioner and AUS$372 (£189) for couples.
For each dollar of income over this, the pension is reduced by 50 cents.
Around a third of Australians have their pension amount – which can total AUS $29,754.40 (£15,127) a year – reduced.
So why is it so different? Helen Morrissey, head of retirement analysis at Hargreaves Lansdown said: “The means-tested nature of the age pension can be explained by the strength of the Australian workplace pension and superannuation system.”
A guarantee has been in place since the 90s which requires employers to contribute to their employees’ pensions.
Although the UK has a similar guarantee, this was only introduced 13 years ago via auto-enrolment, and the mandatory employer contribution rate is only 3 per cent, compared to 11.5 per cent in Australia, increasing to 12 per cent in July this year.
In the UK, people can also opt-out of their workplace contributions, but Alistair McQueen explains that a “crucial” difference is that in Australia, there is no opt-out.
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