To think the UK unfairly taxes families?

[OwnGravityField]

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?

This is what I fear will happen. Instead of the current policies being floated out to newspapers to test the waters, we’re going to end up with 2p added to NI and the disparity in tax treatment will get even worse.

Yes, until the end of maternity leave, although I would argue that that one year should be quite easy to 'make up' as you only need 35 years of NI contributions and most people work 40+ years

Our very complicated tax system has happened because successive governments, over generations, have used various taxation approaches and incentives to achieve short term results and address specific problems. None of it was designed as a holistic system.

National Insurance started in 1911 and was revamped in 1948 alongside the 'free at the point of delivery' NHS.
People weren't saving enough, so there were TESSA (tax-exempt special saving accounts) These accounts were replaced by ISAs in 1999.
People weren't investing in pensions so there were a range of measure to encourage that.
etc. etc.

We have a cobbled together system.

Same with taxes on cars. There was tax relief if you had a diesel car (until 2001). Same currently with electric cars - but possibly about to change.

Governments use tax to change behaviour. Then when it happens and the tax receipts are reduced they have to do something different. It would be a bold government who who address the whole system collectively. Essentially everyone would be upset. No-one would vote for them. And we'd end up with crackpot system.

Most people do. One only has to look at their living conditions, know their jobs etc
Most people will have known at least a couple of grandparents when they grew up. I only knew one grandfather but I still know basically what the other set of grandparents did for a living and had or had not.

Quite! Where has this fantasy that previous generations had it easy, come from?
My grandmother had 12 children and worked all her life. All her children ( bar 1) were in factories by 13. All of these women worked all their lives on poverty pay no job security- no equal pay then!
Sacked when pregnant, sacked often even when they married eg in banks, teachers in schools etc. so had to get whatever grim jobs they could eg cleaning in factories, offices carrying heavy buckets of water etc. No women could get a mortgage, takeout loans,
No NHS so had to pay for medical care ie had none as too poor to pay.
No job security,( dockers eg just lined up every morning and hoped to be chosen to work no Health and Safety rules, no sick pay, no maternity pay - just simpler to sack women/ people who were sick.
Most children had to leave school at 15 until Comprehensive Schools were brought in. The notorious 11+ exam, taken at 10/11, particularly impacted the future of girls as boys were in single sex Grammar Schools who had much lower marks. This 11+, brought in on the back of falsified 'evidence' that children's ability to study was decided at a young age meant that most children , maybe 70-80% left school with no qualifications and few opportunities of remedying it.
Opportunities for girls were poor - so restrictions on their access to eg Medical course at Uni, access to professions, Oxbridge etc.

You are being had Op. You are being played by those who want you to spend your energy attacking false enemies, the elderly (btw you will be old one day, unbelievable it may seem now ) instead of seeing where the real enemies are -in the exploitative employers (off shoring their huge profits, avoiding taxation) and those who want to remove any or all rights working people now have (Tories, Reform) and take us back to the days before the Labour Party brought in the NHS in 1948 and the current Labour efforts to start sick pay from day 1, right to secure work without fire and rehire, without compulsory Zero hour contracts etc ( Reform, Tories).

All the elderly you envy/despise fought long and hard to their own detriment often, striking and losing money eg, even being imprisoned (my uncle got black listed ie no employer would hire him and 3 months in Strangeways for sedition, (encouraging people to strike for better pay and conditions) to ensure you and the others in the generations after them would not have to endure the same hardships.

Ignorance is dangerous. A people that doesn't know its own history is doomed to relive it.

Of course this is true
similarly, working people pay ni whilst using it very rarely but benefit from it when they are more likely to need it
People who have kids use it more than those who don’t but it is there for everyone when they need it.

If pensioners are required to pay ni just because they are more likely to need it more once they become pensioners how much money they have is irrelevant.

Better off pensioners don’t Automatically need it more than poorer ones.

If as you say payment should be based on need then all pensioners should be required to pay.
Equally as parents need it for their kids they should pay more based on the multiple of lives they support

Doesn’t sound so fair now does it
No
That's not what the welfare state is all about and never should be

We work and pay in and all people of working age should work ( bar severely disabled who can’t ) and all people should pay ni whilst doing so.
Equally and without exemption

The 3 million who get over 25k is probably quite misleading. I would hazard a guess that the majority of those are men, and that income is split between a couple, so 12.5k each. Those who are retired now were born in 40's and 50's, where women having a higher paid role to enable them to put enough into a pension to get 25k income per year from it is unusual. Whereas many of those earning 25k now are likely to have 2 adults earning that, so double a pensioners income.

In which case if pensioners should pay ni on their income ( that they have btw paid towards )
then so should
UC payments and PIP payments

In fact let’s go for all income over the threshold for everyone.

Or alternatively, let's go for anyone who isn't you

I'd still allow a tax free portion but I agree people should be taxed on every pound of income - no matter where its from including those on long term benefits

What they fail to understand is that, until the process changes, the poor ones following them into the works markets will be funding their pensions too….
and it all goes around again, and again……..

We don’t really benefit from house prices going up - we still need to live in any house we own until we die.
Economic changes have favoured the rich, there’s also been deflation due to the government printing more money. Setting workers against pensioners is a political tactic that ignores the real problem - we are being screwed by the wealthy.

Honestly stop it with the pensioners. Do you get they are retired and can’t earn any money? Yes, families are paying too much. Everyone is but many are not even net contributors.

I’m not a pensioner
but yes I don’t receive any cash benefits either ie UC PIP etc

This isn’t about me though

This is looking at all benefits as income
So all money from whatever source over the £12570 allowance should be taxed

Irrespective of who they are or where the money comes from.
The pp I tagged said it wasn’t a matter of jealousy but fairness so let’s look at that radical thought then

Mil gets £12.6k from her private pension and £4k from her dh’s pension, she didn’t work for many years either. She’ll be fine paying the NI. Portion on her income tax. We’ll be fine paying NI because there is no option - we’ve always assumed we won’t get a state pension either / there just isn’t enough money around - too many people are not working compared to people who are working and as the population age this is only going to get worse.

It goes towards Pensions and the NHS? Do you wish to defund both?

@OwnGravityField why have you only made this about working families?

She must have had quite a decent job then? My mum worked as admin for nhs for about 15-20 years part time. Her nhs pension is about 4-5k per year due to relatively low pay, part time and limited years. Quite a few of my friends mums never worked, they weren't well off, it just wasn't expected I don't think. So all reliant on their husbands private pension. There will of course be some women in their 70's with a decent pension, but many more men with one.

I'm not sure i said anywhere that I wish to defund pensions and the NHS?🤔

However they certainly both cannot continue in their current form. Not sure I'm alone in thinking that. Saying you think scrapping national insurance and describing it as a tax on working people doesn't mean you think pensions and the NHS should be defunded.

Well if you cut the tax that collects money for them, either you replace it or you think that they should be defunded. There are no magic money trees.

What a complete crock of shit, OP.

It doesn’t matter if they don’t have a high income they won’t pay a lot of tax that’s how it works for everyone - I don’t think pensioners should be an exception. Everyone should pay the same tax.

My mum spent over a year looking into our family tree so her research is sound.

You do realise that young people will not always be young don't you? Their time will come. You have to be patient as other generations have been. It seems you want it all and you want in NOW.

No I would like tax fairness between the generations