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?

Sorry but in 1985, I had every intention of going back to work. I simply could not find any childcare. In my town there were NO nurseries for children under 3. I looked and enquired about all options. In the end I became a SAHP and my husband changed his job to one that was better paid but meant being away from home Monday to Thursday .

There's this thread aswell
Its running at the moment
Some eye watering figures

I think the personal taxfree allowance should be raised. And better off pensioners should pay NI

Honestly picking this thread as 'evidence' that people cant afford to be SAHP because everyone these days spends as much as the people here is the most ridiculous argument ever. You might as well say Richard Branson / Alan Sugar are boomers so all boomers are rich.

Yet that’s not at all what the thread shows or indeed the intention of posting it
It shows where money goes these days and to those older mumsnetters they will see how times have changed

Such a shame we don’t have similar information for previous decades

I know times have changed, thanks.
I couldn't find that thread to read it but i guess if people ars paying £25 for soft play on a run-of-the-mill Saturday, it also illustrates the lifestyle creep i was talking about above.
That would have been a big treat (ie birthday) growing up in the 1970s if it existed.
It's this sort ofcspending and expectation that means havong a SA H P is 'impossible'

Hmmm….no. Not really. Not for everyone.

Why are you ignoring that pensioners paid it too when they were working?

You will also not pay it when you reach pension age.

Your first point is irrelevant. It doesn't justify pensioners paying a lower rate of tax now.
Your second point is ridiculous. Do you have a crystal ball so that you can see what the tax rates will be in 2 years time, never mind 30?! Do people honestly assume that subsequent generations will enjoy exactly the same benefits that the current pensioners are enjoying? Surely you can see that this won't happen and that many of today's workers will pay huge rates of tax to pay for current pensioners and then not receive state pensions themselves.

We are going round and round in circles here.

If you honestly think that having a cheap package deal to Magaluf once a year and getting your nails done in a cheap nail bar but being unable to buy a home or have children because you still need to live in your parents's basement constitutes a better quality of life then I would question your entire judgement.
I am really tired of older people moaning about how tough their life was, while completely failing to even try to understand or address younger people's frustrations. No one has denied that some things have improved, rights for women being one of them, but it is simply stupid/disingenuous to pretend that the young have a better deal or a better qol. The current pensioners are the most fortunate generation ever, past and future and are still getting special treatment by the tax system. That is clearly unfair.

I was talking about families not someone young enough to want to holiday in Magaluf. Two of our adult children in their 30s are better off than we are now, let alone back when they were the same age as their children. You’re so blinkered on this issue that it’s pointless engaging with you.

We already have a relatively high tax free personal allowance compared with other comparable countries.

Although I hate the man, I think Gordon Brown had it right when he introduced the lower 10% income tax rate instead of raising the personal allowance. Unfortunately, like most things he did, he ballsed it up and removed the lower starting 10% rate after a couple of years. But the idea was spot on.

We need to broaden the tax base, get more people accustomed to paying tax, even at low rates, to avoid the behavioural issues around the thresholds. If someone was paying 10% tax on an income of say £10k, they would be less likely to take behavioural steps to stop their income rising and paying a bit more tax, whereas someone on say £12k may well take planning steps to avoid paying any tax if their income would otherwise rise to £13k. Yes, I know tax is only on the "extra", but peoples' behaviour can sometimes not make sense to others but make perfect sense to them!

But are you comparing their jobs/professions/responsibilities with your job at their age??

My son is on a much high wage than I am on now and also the kind of wage I was on when I was his age. BUT, his work/profession is completely different so you can't really compare. If I'd have had his job/profession when I was his age, I'd have been on a much higher wage too!

You can only really compare if genuinely like for like.

But are you comparing their jobs/professions/responsibilities with your job at their age??

Yes, they’re in extremely similar occupations.

But you don't know that.
You are defaulting to the position that everything was better in the past and everything is awful for you now and will be worse in the future.
You don't know what will happen so it's bizarre to justify your anger by projecting to what may never happen.

What a ridiculous response. That is the way our society is built, is that you contribute to NI when you are working, it's been that way for over a 100 years so that you can receive a pension when you are less able to work due to old age, You will rely on this too. We all rely on this.

Are you planning to say no to a state pension?

It’s easy enough for them anyway. Just don’t vote for any government that threatens your pension rights.