Andy Burnham faces pressure to reform pension system
Andy Burnham should introduce a ‘pensions sacrifice OBE’ which would allow wealthy pensioners to opt out of their state pension for at least three years in return for an honour, a Labour Party pressure group allied with the prime minister has recommended, reports BritPanorama.
Compass, a leading think tank, has compiled a report outlining 100 policies it believes the prime minister should implement in his first 100 days. This report will be released in three parts over the next three weeks.
Neil Lawson, head of Compass and co-founder of Mainstream Labour, the Burnham-backed faction set up in August 2025, outlined recommendations that accompany Burnham’s expected policies as he aims to establish himself in leadership.
As public finances come under increasing scrutiny, the report advocates allowing affluent pensioners to forgo their state pension for a duration in exchange for a ‘Pensions Sacrifice’ OBE, rewarding them for contributing to education or other vital causes.
This proposal emerges amid a growing pension crisis in Britain, exacerbated by an ageing population, falling birth rates, and a declining workforce.
The Office for Budget Responsibility has noted that the state pension comprises the largest portion of welfare spending and predicts its fiscal impact to rise by 2.7 per cent of GDP between 2028/29 and 2073/74, influenced by demographic shifts and the triple-lock policy.
Compass further likens this initiative to the altruism espoused by groups like Patriotic Millionaires, which advocates for higher taxes on the wealthy alongside reducing economic inequality.
Amid challenging economic circumstances, Burnham faces tough decisions for his upcoming budget, including potential tax increases, heightened borrowing, or welfare cuts to accommodate rising defence costs and proposed care system reforms.
Burnham’s administration has already announced policies aimed at invigorating the local economy, including a 20 per cent business rate cut for pubs, clubs, and live music venues, a VAT reduction on electricity bills, and capping bus fares at £2 starting in January.
However, these measures may impose significant costs on the government budget, with business rate cuts alone potentially costing around £100m annually and an unclear funding structure.
Moreover, Burnham must address an estimated £4.7bn gap in funding for defence spending as outlined in Sir Keir Starmer’s plan. His first budget is due to be presented on October 28, described as “built on fiscal discipline.”
Compass has intensified calls for implementing a wealth tax, proposing a two per cent tax on wealth exceeding £1m and 5-10 per cent for those with assets surpassing £10m to support a universal basic income.
Additional policy recommendations include emergency decarbonisation measures, promoting a speed limit of 50mph for fossil fuel-powered vehicles, and introducing a parental leave fund akin to Denmark’s DA Barsel, funded by contributions from businesses.
Downing Street has been approached for comment.
