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 that's hard to argue with but many are trying, although not one has presented a sensible argument. It's mostly been accusations of ageism, statements that pensioners had it very hard when they were small, statements about how low the UK state pension is, etc.

No of course I am not resentful. I was just pointing out that not all mums could afford to stay at home in the 1970's and 80's anymore than they can now despite not paying for half the shit we do now.

Okay, fair point. There were certainly many women working in the 70s/80s, just a lot less than nowadays, as basic essentials such as housing have become unaffordable, even on two incomes.

I see the massive increase in consumerism and debt as a huge disadvantage for today's young, rather than an advantage. I therefore can never understand the moaning posts that I've seen about how OAPs never had mobile phones or Netflix. Obviously, that does not apply to you.

@rainingsnoring, it's easy to mock when you can't really respond sensibly to the poster, who actually was talking complete sense.
PPs are keen to point out that there were more SAHMs in the past (were there?) but the fact is that a lot of things that are considered basic and essential today were just not back then.
Yes, there were no computers/nail bars/smartphones etc, but life really was not as extravagant as it is now. I well remember posters during the winter when energy costs shot up declaring they 'refuse' to let their children 'freeze' by not heating the house when we had no central heating at all growing up in the 1970s. I didn't know leaving the heating on overnight was even a thing until that winter.
I am not saying don't heat your house, clearly, but that is a good example of how expectations and norms have shifted in just one generation.
Today women say they can't afford to stay at home but what they mean is they can't afford a lifestyle that is far in excess of the lifestyle I was familiar with. Very few families had two cars, eating out was pretty rare, mostly just for birthdays and special occasions. We had fewer clothes and they were passed down from family members or friends. Holidays for us were in a caravan in the UK. Soft play - if it existed - would have been very much a birthday treat and new toys were really just for Christmas and birthdays.
Yes house prices are a lot higher relative to income today, but although I would never say young people should ditch a coffee to enable them to buy an house, the fact is all these 'basic' expenses add up, so expenditure is a lot higher now for a 'normal' family than it used to be.
I'm sure you will trot out that video again because I am saying things you don't want to hear, but hey ho.

I have no real issue with there being a separate tax (NI) which pensioners are exempt from. That being said, I also don't mind if they change the system. Young families on low income do get a fair bit of support through UC which your/our parents never benefited from though and look at the uproar when they talked about scrapping the winter fuel allowance for pensioners not in receipt of pension credits. It's just shuffling and taking money from one demographic or another to give to another many of whom are struggling in both camps.

I am with Zak - tax the billionnaires!

Hmm. I see that you chose to ignore the other response where you had made incorrect assumptions and jumped on this one instead!
The other poster is quite right that there was less discretionary spending previously. Of course that is true. I responded in jest because I have seen so many competitive moaning type posts from Boomers which are incredibly tiresome and foolish (that didn't apply to hers). I also wrote in my response to her, where I admitted that her point, when clarified was fair, that I think this is a huge disadvantage for today's young rather than the reverse.
Believe it or not, I'm middle aged and also grew up with no foreign holidays (okay, we went to France once!), one car, ate out very rarely, less clothes, etc but we could also afford a SAHP and a very decent home! Anyone with sense would certainly rather sacrifice the former than the latter. I have absolutely no resentment about 'missing out' on such things. I feel very sorry for my DC's generation, who have a far worse time.

A lot of people are confused with how much disposable income today's younger generations have.

Bills & housing costs make a huge difference

"In 1993, the average householder paying for either rent or a mortgage, alongside electricity, gas, telephone, TV licence and car insurance would spend £382.39."

"Adjusted for inflation, this is £570 less than what consumers are paying for basic bills now."

There were 3 (then 4) channels on the telly and no-one had a mobile phone, internet, ate out, went for coffee, had netflix etc

Why would you have things that didn't exist though?
People did go out, did buy beauty products, went to pubs etc. None of this things were new in the last decade.

And there were certainly more SAHMs in the past. The stats bear this out and they don't even take into account hours worked, which are much higher now.

Exactly. Some people seem to think purely in terms of income or respond with jealousy to the fact that UC exists without giving any thought to how much basic essentials such as housing, etc cost and how costs rise considerably if two working parents are necessary.

Well said.

Other differences between now and those "good old days when one income could support a household":

Very few people had flown on an airplane or holidayed abroad
Very few people attended university
Dining out/takeaway was rare - like maybe 3-4 times a year
Food was much more limited in quality and quantity; snacking and ready availability of soft drinks, crisps etc. was not the norm, let alone purchasing bottled water. We were always pleasantly surprised on the very seldom occasions mum would split a couple bottles of coke and small bag of crisps among us while watching television.
Few gadgets. I remember in the 70s dad bringing home an electronic calculator and literally the neighbours came over to marvel at it. Now you can buy them in the poundshop at 1/10th the size of that one
Pets did not receive human-level medical care
Kids and teens did not have myriad paid "activities," sport or lessons
Clothing was far more scant, I recall having 2-3 pairs of shoes and we weren't poor
My mother never allowed us to get anything when the ice cream van went through the neighbourhood; when I asked why as an adult she said "we simply could not afford it. We literally didn't have the spare change." And my dad had a decent job at Ford.
Eyeglasses were very costly and if they broke, you wore them fixed with cello tape until the next year. And everyone was very upset; they were treated like treasured items.

Furniture was sparse and secondhand.

Those and other frugalities were the reality of having a one-earner SAHM household in the 60s/70s. People's lives barely resembled the way even lower-income people expect to live nowadays.

We used the library, wore second-hand clothing, mum pulled us to the shops in a wagon because she didn't have a car. Kids amused themselves and weren't entrtained every moment, and were expected to contribute with chores. It is quite possible to "survive on one income" in just that way today, but people aren't willing to deprive themselves to that extent.

You can have this instead so that you can reminisce about how tough things were when people couldn't afford gadgets.

I agree. Go to work. Pay for your own childcare. I had to.

Agreed. Those living on the State Pension alone wouldn’t be affected by the change as they don’t (or barely) pay tax anyway!

I’m sure many pensioners did have it hard when they were growing up and many do today, but on average the disparity between the wealth of the young and old has never been greater… The older generation is (on average) VASTLY more wealthy!

Skewing the tax regime to further benefit them disproportionately is a shameful unfairness that has massive negative impacts on society… For one, we are facing demographic population collapse because couples can’t afford a place of their own until they’re much older.

We could increase the number of skilled and experienced working people contributing significantly to the economy if professionals weren’t able to afford to retire quite as early.

Removing NI and increasing Income Tax to compensate would help with this (families would benefit as their reduction in NI would be more than their increase in Income Tax), as well as keeping the tax allowance from pension contributions at the standard rate irrespective of earnings, meaning they take longer to grow their pension pot. The typical standard rate payer wouldn’t be affected!

The highly productive 50 and 60 experienced professionals would work for a few years longer on average with a massive boost to the economy as a result!

Btw, I’d be exactly one of those who’s be adversely affected by such a move, so it’s definitely not coming from a place of envy!

Well my mum went to work full time and she paid for child care / maybe she was a wrong’en but she paid out our housekeeper a pittance / pocket money you might say, nowadays she’d had to pay minimum wage, so much easier back then to under pay someone. She was ri to er happy or desperate as she worked for our family for nearly 30 years.

Why? What logical reason is there for not funding childcare? Other than “because you had to” 🙄

You sound like one one those FB posts. SHARE IF U AGREE

I’m hoping the Gov is having a better quality debate than this thread which utterly lacks forward thinking. Pensioners even up against other pensioners. People should understand that the Gov didn’t save up all their contributions over the years, they are relying on this generation to pay the bills - we need more workers to subsidise the job workers and that isn’t going to happen, it might be time to jump shipof you have the cash.

Why would you expect everyone over a certain age to think the same thing?

I would expect them to have similar aims.

Why? I wouldn’t expect every member of any age group to have similar aims. I’m never going to want the same things as the majority of my age group who voted for Brexit and want a Tory or Reform government.

Nail on the head. Benefits/tax incentives should be aimed at potentially working people so that they can work or work more to grow the economy.

Other countries give tax incentives for "work" such as for parents, commuting costs, work clothing, etc. The UK is a bit of a loner in not encouraging people to work!

This.

I’m so sick of all this budget manoeuvring. Publish the fucking thing and be damned!

So did I. Big deal.
This is not a 'tit for tat situation. Some of the comments on here are really juvenile and unpleasant.

Pensioners should pay the same rate of tax as everyone else because there is absolutely no reason for them to give special treatment to the wealthiest group within the UK population.
Financial assistance with childcare, which is provided to a much greater extent in many other countries compared to the UK, is to encourage both parents to work, pay tax and contribute to society by providing services. It is also to encourage younger people to have children, which is of benefit to the whole of society. Both these groups are of major benefit to the pensioners.

That's patently not correct though, is it? It's not how it works here, or on the continent. Tax is paid post retirement in the UK and on the continent, it is NI that is not, (currently) paid post retirement in the UK. But the equivalent social security contributions are also not paid by the retired in France, Italy or Germany and, I suspect, everywhere else on the continent.

Not only that, if anything its not a families being treated unfairly, but single people, of whom the retired make up a significant proportion, due to being widows/widowers. Many of the costs of living are fixed whether there are one, two or more people living at an address. Yet single people don't get anything to compensate for that. Even council tax, which does attract some discount, is proportionally much more expensive if you a a single person household. Most utilities are also not half the cost if there's one person not two, and neither are insurance, rent or many other things.

The Government is failing you all by taxing away growth, so people are worse off. The rise in single person households is also another reason why people feel their standards of living are not the same as previous generations. People are single for longer, and often widowed for much longer, and therefore living on a single income not two for more of their lives.