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?

I think you miss the point - it's not that we want to give up our state pension - it's that we recognise that it simply isn't affordable for the country. We have prepared for it via our pension and savings. It would be easier to stick our head in the sand and shouting at anyone who dares to speak up but we cannot continue to pay for the increasing non-working proportion of our population without making some major adjustments to tax and benefits. The labour have tried and failed to cut benefits to the disabled and the elderly but the reality of the situation has not changed - you can continue ranting all you like but the money has to come from somewhere, the magic money tree doesn't exist.

Oh I agree 100%.
What I don't agree with is the vitriol against pensioners on here and the refusal to accept that every generation has the most costs when they are bringing up children. It was ever thus.
Why people in the thick of the most expensive years of their life should think they are in any way comparable to people who have already done that and come out of the other side financially is a mystery to me. It has never been the case.
Yes, the despised 'boomers' have done well for themselves - lucky them. I am not one, but may benefit from my mum of FIL's good fortune, who knows?
It has always been the case that money tricked down generations if there was any, but young families seem to think they have a God-given right to have their share NOW. They don't. Their time will come when they stop working. Who knows what will have happened by then? House prices may have crashed and bounced back again for all we know. Of course, that being the case, the young'uns will be more than happy to forgo their pension and forfeit the value of their house to the greater good. Of course.

Try being a single person household, with no kids. We pay proportionately much more than others, and will have to ensure we've got adequate pension/old age arrangements. I'm just turned 50, so still a while until retirement, but I've not had a significant (with inflation) pay rise for YEARS - Higher Education - so it's a struggle. Especially with nothing/no-one to fall back on.

I will say that I'm lucky enough to have my mortgage only having 6 years left on it. I bought on a 90% mortgage, which I know doesn't really exist now. I get a little fed up with the 'working families' rhetoric, when I've worked since I was 17, and never had maternity leave, etc., and all I get is the single person's council tax rate. I wouldn't mind, if the public services were way better funded.....

Last time that happened was in the 60s those pensions will be dead by now

I never pay any attention to generation hate - it goes both ways from what I observe and it's so dull.
We need to look after the truly vulnerable, we need to have genuine sick pay for the genuinely sick, we need to invest in skills, we need to offer young people better training than 3 years at Uni and a £60k debt - we need a radical overhall of the tax and benefit system - it's been long over due but we have been too consumed with Brexit, Covid and now immigrants - we have voted in incompetent gov, after incompetent gov - lacking integrity, creativity, courage, vision and leadership. Who would have thought the country couldn't get their shit together for this long but people are too busy protecting their own backyard - so I guess we got the Gov we deserved.

The % of pensioners still living in poverty means the triple lock needs to stay until that reduces

People with private pensions rarely come into this group so are irrelevant

Child poverty is also irrelevant to this subject….obviously!
We cannot play Each deprived section of society off of each other and as such each is dealt with separately

How do you pay proportionally much more than others ?

Because I'm a household of 1. The same could be paid by a household of 5, if there's a SAHP, and 3 kids. Also, council tax reduction of 25% isn't really cutting it, when you've households of 3 generations (for example) paying the full whack for 4 adults, and kids.

Patronising! Thank you.

It should be absolute compulsory to pay into your workplace pension. No opting out for any reason. And self employed people should have to prove to HMRC they are contributing x amount.

Especially if they start means testing it.

I suppose it’s swings and roundabouts really
The family with kids have the huge expense of kids so less disposable income and basically bringing up the next generation of workers and tax payers. We’ll all rely on them one day.

Families sharing houses with higher occupancy are at least sharing so we don’t need to build more and more properties for single occupancy. I appreciate that comes across as insensitive but it’s a fact that affects housing

I agree on the council tax issue. One person doesnt use more than 4 in the same sized house. However it’s based on the house at the moment. Basing ctax on usage brings us back to the poll tax. Perhaps now more people might be happier with the poll tax than they were during Thatchers era as there are more single occupancy properties.

Overall though the burden of expense is always with families bringing up children

Estate agents jump on SINKYs and DINKYs for a very good reason

25% (not 50) council tax reduction. Electricity and gas standing charges. Only one TFA per household.

Obviously there is the rent/mortgage, though obviously that's not the same.

If you are a single self employed person, then no sick pay, no employers' pension contributions, no holiday pay, no maternity pay. It can feel terribly precarious.

I do agree that the loud is all on one set of shoulders but it’s a choice not to share housing and bills

It’s also a choice to be self employed and is very stressful again if you’re on your own.

This really isn't the point of the thread. Those who dismiss it simply as "ageist" are spectacularly failing to grasp the issue, and that is that we are facing an affordability catastrophe. We cannot afford this level of expenditure.

Totally agree - everyone who works should take responsibility for supporting themselves as much as possible.

Well it wasn't a choice with me! My husband of 16 years decided he'd rather trade me in for a younger model. And we were unable to have children, and the relationship I had after divorcing turned out to be a disaster. It has never been my choice to live in my own and I'm far from being the only one!

Self employment was a choice I suppose.

I’m talking about living alone generally. Not specific circumstances

A lot of people share or/ and have tenants for example to spread the costs and bring in additional income (if they own the property )Not doing so again is personal choice of course

Yeah I wasn't turning this into a "what about meeeee?" post. They always get in my nerves.

I was making the point that absolutely loads of people don't live in their own by choice.

And because of the massive cost of accommodation, the size of the places they can afford often don't lend themselves to tenants and lodges.

LodgeRs

Similar here. My relationship broke down because of my infertility, and our inability to have a much wanted child. I'm in a 2 bed flat, so not enormous, but I do work from home about 40% of the time, so it's nice to have my 'office' set up in the spare room. I'm in a relatively expensive city for property too. I feel that I'm too old (and not quite poor enough!) to have a lodger/housemate. It doesn't seem unreasonable.

A thread like this is ageist. It challenges one sector of the population, and pits them against another. Whichever side of the barrier you are on.

Bottom line is that the whole system is broken, the whole system is an unaffordable catastrophe. The whole system needs changed. That includes tax, pension, benefits, childcare, immigration, assylum, social care... Honestly that is too big for any government to handle.

It is easier for governments and the very wealthy to let the little people fight it out amongst themselves. I really wish this would stop.

The system has to change and they have to start somewhere. Everyone paying the same taxes is a great start. I'm sorry you think this thread is ageist - the problem is the policy of not charging anyone over the state pension age NI contribution is a fundamentally ageist policy. Pensioners are collectively not poor, some are poor and some aren't, like every group in society. Those who are poor should be supported by the state and those who are not should be facing the same taxes as the rest of the population - that's fair and it's not ageist.

What utter nonsense.

There is no shortage of human beings on the planet, and countries can always fill their labour and consumption needs via sensible immigration policies.

Aging is involuntary. Producing kids one cannot properly afford to rear is a proactive choice. I say take care of people who are experiencing INvoluntary issues such as aging, illness and accident rather than propping up the lifestyle choices of people who reproduce beyond their means.

Many pensioners raised their children without tax credits, UC and free childcare.
How do you plan to address that unfairness.
I'm over a decade away from pension age with a retirement age of 68 (for now)but I also had no option of working 24 hours a week and getting a taxpayer handout of hundreds a month to provide the rest of my income when my kids were growing up.
Beginning to feel shafted at both ends of the scale!

I agree. It should have been done ages ago. The problem is that wages have been stagnant since the GFC and salaries are already very low compared to the cost of housing, energy, etc so the amounts saved by most are unlikely to be enough to sustain them in later life, especially as we are now in a period of generally higher inflation than pre 2022.