to hope the government has the guts to tax WEALTHY pensioners more

[ReallyTired]

The Fabian society has suggested that wealthy pensioners pay more tax.

www.bbc.co.uk/news/education-22220345

Some how I can't see a conservative wanting to tax wealthy pensioners more when they all vote Tory.

I find it unfair that pensioners with an income more the average family's income get free bus buses, winter fuel allowance, TV licence as well as paying less tax and national insurance. It is about time that the the wealthy pensioners took their share of the pain of the cuts.

I am in favour of well off pensioners having free bus passes, winter fuel allowance as these things encourage independence and improve health. I would like to see the money for these things clawed back by WEALTHY pensioners paying more income tax.

But there was no benefit culture. This 3 generations of unemployed has been disproved by the Rowntree foundation who couldn't find anyone matching the description. Stats show that MOST people are not long term unemployed.

Yes there were more sahps because you could provide for a family on one income. They weren't claiming benefits necessarily.

And there was a huge amount of unemployment in the 1980s. It is a bit like my GPs talking about "immigrants"

There certainly was. I made 115 job applications when I graduated. Plenty of graduates even never ever made it into proper careers they wanted in those early 80s days before Thatcher's good work took hold. It was a very difficult time.

The bottom line is: Those who's mantra is 'it's not fair. Todays pensioners have got it easier than I do' are trying to turn a massively complex issue into a black and white one. You cannot possibly 'balance out' people's lives like that. By cherry picking the things you want to compare and ignoring the ones you don't!

We've already heard about how tax rates were far higher in previous years... What about mortgage interest rates too? I distinctly remember when what was our under £300 per month mortgage on a very modest home rapidly became £400...£600...£700... There was nothing 'fair' about it- it wasn't the home owners fault, we just ended up forking out massive interest payments (I remember this being when DHs take home pay in a professional job was about £900 a month. )There was also no subsidised childcare - we struggled massively. Mortgages are unbelievably cheap now and have been for quite a few years. It's swings and roundabouts.

London man - but employers' NI is not a tax on the employee. if employers NI was abolished, salaries would not rise.

I disagree. They wouldn't increase the next day, but job market competition would mean they would adjust over a period of time.

Suppose legislation was passed that required all employers to give a pay increase equivalent to employers NI, abolished NI for the employer, but increased taxes so that all the pay increase was taken from the worker. No-one of the three (employer, worker, state) would be any better or worse off.

Similarly, suppose there was a compulsory wage cute so that workers gross salary was now equal to previous after-tax salary, all employee tax abolished, but employer tax increased so that once again none of the three lost or gained a penny.

In neither of these scenarios would anything important have changed from the point of view of any of the three parties.

Whether you levy payroll taxes on employer or employee should ultimately make no difference to the take-home pay of the employee. If you split taxes between the two, then change the split, then there will be a time-lag while adjustment takes place, after which you will end up with the same fundamental figures that would exist regardless of the split. Those fundamental figures are determined by external factors that are the same in all scenarios.

Yes I can't see the point of this comparing. Since pensioners are hardly a select group in that nearly everybody one day will live to pensionable age. In the past, high interest rates, no subsidised childcare, not so generous maternity leave, no tax credits, and a lot of reduncancies in the 1980's. And old people can't get jobs and I'd rather see older people well provided for.

Londonman, I see your point, but employer NI really is just another tax. No guarantee that any employer would increase wages if it became merged into income taxes generally - corporation tax has reduced since around 2007, but I don't imagine most people have seen a commensurate increase in their salaries over the last five/six years? And although it might be reasonable to impose a tax equivalent to NI on state pensions, it'd be politically difficult (and imo unfair) to do that on private pensions or savings because contributions to private pensions/putting away savings is done out of income that's already been subject to NI (and subject to tax, in the case of savings). There's a logical reason for the exemptions and treatment of private pension income as investment income, though I agree that people of whatever age should pay NI on earned income - it's frankly ridiculous that someone over pension age doesn't have to pay this on their earnings. But leaving aside NI, pensioners will be paying similar income tax once the personal allowance becomes the same for all ages (next year or the year after I think, cba to look it up).

Going back to the report that prompted all this, I always think it's an interesting exercise when reading research/lobbying/policy reports to see who commissioned the report and provided the funding. Interestingly, this report was commissioned and funded by a provider of rented housing, which has strong interests in the rental market specifically for pensioners. Lots of stuff in the report not only about pensioners contributing more but also about housing issues for the wealthier pensioners, how they suffer social isolation, problems with maintaining their oversized houses and rolling acres of garden, heating their unused bedrooms. Then goes on at some length about how they don't want to move out of these houses, and about how retirement flats just don't seem to be seen as a completely desirable alternative. Which is a problem, as far as the report is concerned. Why on earth don't these stupid pensioners see that they should just get out of their enormous houses, even if they own said enormous houses, and move into a nice little flat.

So the way in which it proposes that the wealthy pensioners "pay their way" is via a land value tax. Which they could only fund by selling their houses. But then, of course, they have to live somewhere? But where? Oh look, there are some nice retirement community flats here, provided by the people that commissioned the report. Well, what a coincidence that is, eh? Who'd have seen that coming?

If Labour get in there may well be land value taxes which may start on London houses but rapidly move down to tax many mumsnetters in mid life with a £400,000 house at 2% a year.

Xenia land taxes are likely to take a long time to come in as they would involve mass valuations, and problems with cash flow and collection - SDLT (Stamp duty) is a far easier target and is already so high that if you live in a nice house in London, it is cheaper to build an extension than to pay the tax on a house move.

Janey I too am old enough to remember, and have paid, sky high interest rates but they were at a time of rocketing inflation meaning that the debt was being inflated away at a fast rate as well as the value of the asset rising - economically, the "real" interest rate was actually quite low and the excess represented the equivalent of an enforced capital repayment (as the real value of the debt was diminishing from the joint cause). The high interest rates back then represented only a cash flow problem but left us all with massive savings in the form of equity which we hadn't really earned in any meaningful sense (be honest).

Anyway, it's daft trying to compare who has/had it worse. We have to start from where we are at and the position is that somehow we expect the young to shoulder the country's debt and to finance high pensions to pensioners who are for some reason ring fenced and given various free allowances as well as their generous pensions and early retirement ages (my friend, a psychiatrist, is about to get her NHS pension at the age of 55 - I worked out that it would cost £3.5 million to buy the equivalent pension in the private sector. This was never the government's intention, it was a miscalculation that needs to be corrected and no, I do not believe it should be honoured because it was expected because that is NOT FAIR on the young whose fault it also was not).

Londonman, employers ni is a company tax, you keep moving it to personal taxation so you can then say pensioners dont pay this tax and claim this means workers are being treated unfairly.

But employees dont pay employers ni, any more than they pay the tax on their employers profits.

No govt would roll employers ni in with income tax as it would look like the govt were taking more money from you.

You are just trying to make a case against pensioners.

underc, I think they are changing NHS pensions so that the pension is based on life time earnings including years on very little as a young doctor rather than what you are on at age 55 so I suppose the state is trying to address this. The rest of us have a retirement age of nearer 70 so I suspect the NHS and teachers and others will have to retire at 70 or 75 in due course and police too - they get to retire so young with pensions they can have another career after.

Afaik many public sector pensions have already changed, with an average rather than final earning used for calculation, and with substantially increased payments into the pension scheme. It's absolutely reasonable to change things , just not reasonable to try to backdate things - otherwise in theory where do you stop?

IDS has said that he'd like wealthier pensioners to give back the universal benefits they don't need.

Telegraph article

It still begs the question of how you define who 'needs it'
You could extend this to any sort of benefit couldn't you..it's not as though everyone on benefits are living at exactly the same level or starting from the same baseline.

This is the big issue - are benefits for those in need which some countries have, a very low basic payment for those who are destitute or are they something you draw on into which you contribute via NI - like you contribute to a private pension. Some states in Europe have the latter - very high NI, much more than here and higher employer NI and high contributory benefits which you do not get if you have never worked and do not pay in.

Our system is a mixture. The contributory systems are expensive to run. The basic benefits ones reward the lazy who choose never to work.

On the winter fuel £250 a year sum I remember when it was brought in. It is not something pensioners worked for and when they started paying NI in 1948 they paid in on the basis of the winter fuel allowance so I certainly think we could abolish that one entirely without misleading anyone. The free travel is not something that applies the same all over the country and I think only applies on buses and tubes and plenty of pensioners are in areas where there are no buses so again I think we can look at that one.

The state pension has just been looked at and is being hugely reformed to a £140 a week single tier if you pay NI for 35 years.

When you think how greedy the MP's are it's a bit rich asking pensioners to give back the money they are supposed not to need.

if the goverment didnt waste it in the first place there would be no need to claw it back from anyone.

. I am just above Pension Credit threshold and I do not "need" my winter fuel allowance. Give it back to the government, they can stuff that idea. I shall continue to give it to the homeless!

Who are 'greedy' though, the wealthy pensioners who have worked to get a state and private pension, the people having child after child whilst living on benefits with no intention of working, the MP's, even dare I say it the SAHM's who choose to stay at home whilst their pensions are still being paid by others?

Of which many pensioners have done the same and often for a lot longer.[ hmm]

Even in Sweden mothers get 13 months full maternity leave + 3 months fixed.

If as a nation we now begrudge 1 or 2 years off per child it is beyond shit.

And it's face it most mums do it for the benefit of their children not because they enjoy CBeebies,being poor and housework.

Maternity leave is one year per child in this country so it's nonsensical to say a year off is 'begrudged'

( of course, today's pensioners were entitled to only 12 weeks leave, and paternity leave was non existent...)

Erm that would be because often those that worked like my mum gave up work to have children never going back and those that weren't working(like mil)never worked whilst they had children at home or if they did they had a part time job that probably paid very little tax.

I certainly don't rem in my history books hoards of women in the 50s and 60s juggling a career,highly paid full time work and children.Obviously some did but far less than today.

And really if we're going to begrudge the paltry time off sahm have then really perhaps we should be begrudging part time workers earning under 10k and paying zero tax.

A lot of double standards on this thread.

Square - 5 years off isnt a paltry time tbh.