I have just found out that the UK is an outlier, in that it completely stops collecting a form of social tax (NI in the UK) once someone gets to pension age.
In every other country, pensioners’ contributtion as a proportion of income is much more similar to working households.
Example of disparity in the UK:
A working person earning 25k pays:
- Income tax: £2,486
- NI: £1,002
- total = £3488
A pensioner with an income of 25k pays only:
- Income tax: £2,486
- no NI
- total = £2486
So, a UK worker on 25k pays 40% MORE total tax than the pensioner (the difference between 2486 and 3488).
Let’s compare with a beloved utopia of fairness, such as Sweden: worker on similar salary pays 9% more tax than a pensioner.
Yes, other countries have slightly larger differences, but none except France come anywhere close to the UK difference in tax treatment between workers and pensioners.
In the interests of balanced sharing of info: France is tax and spend basket case. France taxes workers roughly twice as hard as pensioners. It’s obscene and the country is practically bankrupt.
Most other European countries narrow the gap by keeping small health or social contributions on pension income.
You might be thinking most UK pensioners don’t have 25k coming in? Nope. 3 million have individual incomes of 25k or more.
Anyway, I think it’s shocking that people at the most expensive time of their lives (kids, mortgage, food) are taxed so much more heavily. AIBU?