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?

Pensioners only have the triple lock until the state pension catches up and brings the majority out of poverty
It was never set up to be used for ever

Pensioners are taxed at the same rate for income tax. Currently they do not pay national insurance

Let’s look at capital gains tax
It’s an income but taxed at 18% riding to just 28% over £50k. ( no ni )
That’s hardly the same as working people including those pensioners who continue to work past pension age

There are many ways workers avoid the full tax and ni on earned income.
Plugging those gaps will reduce the welfare spend just for starters (including as an aside more student loan payback, the lack of which is increasing the % interest for young students).

With a UC increase of 6% and no changes to eligibility for PIP etc etc it’s clear Labour are not treating everyone equally and not getting a handle on spending.
So what do people expect
Obviously taxes were going to rise under Labour and obviously most of us were going to foot the bill

Nail on the head. Those of identical incomes (from whatever source) should pay the same amount of tax, regardless of age, working status etc
Totally agree as long as this includes people on all benefits (not just state pension). Just because a benefit is a contributed one shouldn't make any difference to paying income tax. I would also have been quite happy to continue paying NI when I carried on working past pension age - to say I'd paid enough was a ridiculous statement, both I and, more importantly, my employer should have continued with the deduction, so cancelling NI and rolling it into income tax would make sense in this instance. Perhaps raise the personal allowance initially though to give everyone a little bit of breathing space?

And we shouldn't forget about people who live off their income generating investments - that includes landlords and those lucky individuals with a very large investment portfolio - I'm guessing it also includes trust funds - they don't pay NI either.
It's time everyone started paying the at the same rate as those on PAYE.

Yup. This

It will be interesting to come back in 20 years when the more vocal against pensioners on this thread are 20 years nearer THEIR pension age and see if they still think the same about things then.
Of course, they will state now that they don't expect a pension, would be happy to pay NI on their pension for the greater good etc, but words are free.

I don't think anyone is making an announcement that they are no longer paying tax (or NI as we are talking about here).
It's the system, which for some reason pensioners are being blamed for as if they personally devised it.

Yes I thought you might go from being the most shafted generation of young parents ever to the most shafted generation of pensioners ever, somehow 🙄

Most pensioners have gone through their lives working. There were no in work benefits. No free childcare. No minimum wage. No employer assisted pension scheme. But everyone thinks they’ve had it so good.

Save your breath. They don't want to hear anything that disproves their theory that they've never had it so bad.

Some of the pensioners on here seem to either have really fevered imaginations or they are unable to read and comprehend basic English.

There have been repeated accusations of ageism, statements that past some posters have said that decades were an 'economic idyl' and now you imagining something else that I haven't said yet again.

I didn't say that at all. Please try to read what has been said and stop making things up.

Who is 'against pensioners'. Why do you need to assume that everything is a personal insult simply because a topic is being discussed?

It has already been explained several times that current workers won't be getting the universal, triple locked pension that current OAPs enjoy. This is why many are fed up at the prospect of paying the wealthiest generation, who also pay less tax, something that they will not receive themselves. If you are irritated and complaining bitterly about the current situation, which favours you so much, we can all be certain that you would be extremely angry and resentful about this.

Some have, some haven't, certainly less women worked, and far less women worked full time compared to now so clearly less childcare was needed. Some had it very hard, there were some disadvantages but overall, they were an incredibly privileged generation.
Even if they were all Saints working 80 hour weeks, why do you think they should receive special treatment when they are the wealthiest generation of ever (a historical anomaly)?

My investment portfolio, pretty decent at age 62,has been achieved by working since age 14 (babysitting, then office clerk at 16, etc) and self-discipline. Not “luck.”

Also by not fucking up, having kids I couldn’t afford, getting entangled with loser men, squandering money on tat, etc.

I am reading your post, but it doesn't make sense.
I am not a pensioner by the way

As has been noted here
The triple lock is only whilst pensions catch up
with the cost of living. For a long time they weren’t and more and more pensioners were living in poverty
As more pensioners are brought out of poverty, over time and with the triple lock it will be disbanded
Currently 16% live in poverty.

It’s not a forever policy and was never set up to be as such

Of note : Pensioner material deprivation – a measure of the household’s inability to afford key essentials – rose from 6% (700,000 pensioners) in 2019–20 to 8% (1 million pensioners) in 2022–23. For example, the fraction of pensioners who could not afford to keep their home warm rose from 2% to 5% (230,000 to 570,000 pensioners).

I was trying to explain, along with the other poster, that current OAP benefits will be gradually reduced and won't be available for middle aged and younger current workers. I said that the reduction in pension, through means testing, getting rid of the triple lock and raising the pension age, as has already happened and will continue to happen, will result in many very poor pensioners in the future (today's younger workers). I did not say that they would be the poorest pensioners ever, just much worse off than the current group. No one has said that they are 'the most shafted generation of young parents ever' either.
I wish people would stop making things up.

Future pensioners will have had the benefit of employer private pension contributions.

Only introduced to all in 2018
Most pensioners today did not benefit from that

Hence predicting what might be in terms of higher private pensions v state pensions is pure guess work

I am not a pensioner actually.
Your vitriol seems to stem from 'facts' that are not facts at all, such as ' current workers won't be getting the universal, triple locked pension that current OAPs enjoy. This is why many are fed up at the prospect of paying the wealthiest generation, who also pay less tax, something that they will not receive themselves'
That is all speculation.

Being a net contributor, maybe my (large) income tax every year paid for your (or other people's) child benefit or other benefit, or generally reduced rate of tax. Was I fed up, or did I complain bitterly? No. Even though I did not receive child benefit, or tax credits, or payments towards nursery costs.

Yes, for some reason unfathomable to me, some on this thread seem to think their situation is unique and workers have never paid for pensioners. I don't know where it has come from.

I'm not sure what you mean by 'it has been noted here'

I know that the TL was introduced giving that reason. I think we would be very naive to suppose that this was the true reason though. It was a bung to pensioners, a large, voting section of the population. Pensions in the UK are generally lower than those in Europe because they pay less in. On average, they also draw around double what they have put in, accounting for inflation and interest. If it was a question of playing catch up, the triple lock would have been withdrawn some time ago as there are now more children living in poverty than pensioners and pensioners are the wealthiest group in aggregate.
Let's not pretend that any government can simply say 'we've caught up now so it's time to scrap the TL'. The screaming over proposed removal of the WFA demonstrated that very clearly.

Just to make it very clear, I know that there are many poor pensioners too. I have met many. Those people should be supported and no one has suggested otherwise. I haven't seen a single older person, who complains of ageism and feels that they are entitled to pay lower tax, suggesting that children in poverty should be better supported though.

You only need to look at the maths to figure it out. Why do you suppose that the pension age has risen here and is rising in numerous other countries? It's obvious what is going to have to happen. No point in pretending otherwise.

I suggest you read some of the excellent comments on this thread that have explained this already and stop presenting straw man arguments.

Talk about missing the point. As I said, check the demographics if you don't understand this.

My parents couldnt afford for one parent to stay home, those days were long before my parents had children and they are in their 70's

There are many things i'd like to see cut, than further attack pensioners money.