Personal allowance frozen - yet 2p off National Insurance

[MikeRafone]

AIBU to think that instead of reducing the tax on NI that the personal allowance raising a couple of hundred pounds would be better for less well of families and pensioners?

PA is frozen until 2028 whilst the last budget knocked off 2p on NI and suggested the same will happen today another 2p

whilst income tax will rise for many as NMW rises in April by £1.01

AIBU no PA shouldn't rise and 2p is ok of NI
YANBU PA should rise and leave NI as it is

If they means test state pension I am stopping work tomorrow and cashing in my pension.

Won’t happen. It would be political suicide.

if Torys stay in the NHS will be privatised and the state pension will rise again and eventually become means tested - like child benefit

This ni reduction basically benefits the well paid jobs. Those at the lower end just out of the low earnings for claiming benefits are still the worse off. Basically you get £20 for every £1000 you earn over the ni threshold as extra cash. So on 23k a year your looking at about £200 a year. Bloody peanuts. Yep when you look at the council tax rises alone this is wiped out.

Just as well they’re not getting back in again any time soon then.

@ruby1957

It just isn't true that people of working age who are not working and have dropped out somehow accounts for the reason why there are fewer working people to support pensioners. I mean, it's a factor, but it's not the biggest one as it would have happened to some extent anyway. The basic fact is that the boomer generation are very numerous and living a lot longer than projected at a time at which fertility has dropped means that there are fewer people of working age (whether or not they are working) to support each pensioner.

www.pensionsage.com/pa/state-pension-increase-to-age-71-needed-to-maintain-status-quo-amid-ageing-population.php

the boomer generation are very numerous and living a lot longer than projected

The first part of that’s true. However, given that the oldest are currently 79, we have no idea if they’ll be an abnormally long lived generation. Life expectancy is falling now.

84 is current average life expectancy for women.

Sorry by average I am referring to the the mean life expectancy.

It’s now 82 for women.

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/2020to2022#:~:text=Life%20expectancy%20at%20birth%20in%20the%20UK%20in%202020%20to,from%2083.0%20years%20for%20females.

@BIossomtoes

I think we have a fair idea that they will have massively outlived all projections when pensions were planned, even if life expectancy slips a bit, it won't slip by much (the current slip is because they average over 3 years in calculating the mortality risk across the population and 3 years ago we had Covid, so life expectancy is likely to go back up again a bit - this is explained well in More or Less on Radio 4). Which is obviously a good thing. But it does mean that a structure that expected to support people for 10-15 years is doing substantially more than that.

Incidentally, you can still buy extra years to complete your NI record if you are short and those years are ludicrously good value if you live 20 years in retirement. Of course, some may not, but the main barrier for me is that I just don't believe I will get a state pension as I'll be ruled out by means testing before I get to 68 (or 71!).

But it does mean that a structure that expected to support people for 10-15 years is doing substantially more than that.

Not really. With a state pension retirement age of 66 and average life expectancy of 82, it’s pretty much spot on at 16 years.

@BIossomtoes

Yes, sorry you're right - it's probably that the boomers are much more numerous and the number of young people are shrinking for the boomer generation. For the generation above, the gap was much larger before the state pension age rose substantially - probably due to fewer people dying from blue collar work (my own grandfather was a member of a blue collar occupational scheme that allowed him to retire at 50 and my grandmother was still drawing a widow's pension until 5 years ago in her 90s!!)

My parents lived to 97 and 99. My mum had her state pension for 37 years and my dad for 34. Dad’s military pension paid out for 48 years! I really hope I don’t live as long.

The thing about reducing NI while leaving the tax threshold the same, is that a third (approximately) of what you gain, you pay in tax.

So, the government is using you. Trying to gaslight you into thinking you are gaining. Where did the "headroom" come from to once again reduce NI? Some of it will have come from the increase in tax the government received.

I've got no skin in the game as I don't pay NI, though I do pay tax.

Opinion polls I've seen indicate that most people would sooner see an increase payment to the NHS. I don't want a super duper new computer system in the NHS, I want more nurses and doctors, paid at more than £16:50 an hour for junior doctors