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?

So the young to Dubai, the pensioners to Thailand and the rest of us stuck here will just have to pay up a fair due.
I agree with NI being scrapped and income tax raised and also an inheritance tax for pretty much everyone.

I'm fed up of it! Politicians use the word "families" when they mean "tax payers" and it's usually preceded by the phrase "hard working". What this government actually means when they said "hard working families" is "people most likely to vote for us" and usually it doesn't mean the people doing the actual tax paying.

I think that the top 50 families in the uk who owm more than 50% of weatlh in the uk.... undoubtable think their tax bill is fine...

The other 59.8m in the uk are right to object to tax hikes

Ah that old chestnut. People buy these things because marketers are so very very successful. Are you you telling us "older generations" were actually faced with the same barrage of consumerist marketing, day in day out every day of their lives but they - unlike the Modern Feckless - had the moral fibre to resist it?

But that's the clincher. People buying such things makes those marketer's richer. If you don't want them to be rich, stop buying their services. Except you can't/won't, because those services afford you the life you lead today.

It's like people complaining about HGVs getting lodged up tiny country roads and damaging the masonry. Stop buying cheat tat from China and there might be less HGVs destroying the countryside.

Nope but they often do seem to be able to spend more within their means and aren’t moaning about the cost of raising children. They’ve done that and gone without the vast amount of seasonal tat, endless renos, all inclusive holidays, nails, coffees, fast food …… etc. etc whilst doing it.

The world and his wife have been poor for generations whilst raising kids.

ALL of which I agree with!

But the "stop buying avocados" people simply ignore the fact that modern young people are faced with an array of almost insurmountable temptation and act morally superior for resisting it, when actually they didn't live in the same environment.

I am not interested in acquiring Stuff, and live in a part of the country where people don't tend to care what you drive and what you wear, but I recognise it must be hard to live in an atmosphere of relentless competition and acquisition. If only it were as simple as simply "not buying stuff".

Besides our entire economy is set up that way - which I also think is a terrible and unsustainable way to run an economy. If everyone suddenly stops buying things because they need their money to pay their every increasing tax bill, what would happen?

We’re all living in that environment!!! I don’t have take aways, coffees, meals out , the latest tech or car, a new kitchen when my old one gets shabby, seasonal tat, expensive holidays because I can’t afford it!!!! My kids are just starting to leave home, there were so many things we didn’t have and couldn’t do when they were tiny- because we couldn’t afford it. Now as I get near retirement and my responsibilities start to lessen I will have more many to spend on luxuries.

The problem with today is parents spend their lives on social media and think a life of luxuries is normal and what they’re entitled to. It isn’t and they’re not. Raising kids costs money and causes the need to go without. If you choose to have kids you choose to have the financial pain that comes with it.

"If everyone suddenly stops buying things because they need their money to pay their every increasing tax bill, what would happen?"

Let's not go there. The economy would implode. Many, many unpleasant things will happen. Which we caught a glimpse of during lockdown with supply chains stopping and the economy being switched off and restarted multiple times as if it were a computer.

I think you are misunderstanding what I'm saying.

My beef is with the people who say "in my day we just made better choices", as though conditions were exactly the same for them as they are for modern young people. Many of them dismiss younger people's economics struggles completely and say that when THEY were young, they just saved and nobly eschewed luxuries, unlike the feckless youngsters, whereas these luxuries didn't even exist when they were young.

Modern life has been set up so that having a phone is essential. And social media is addictive and yes, people then see stuff that shows them that things which would be considered luxuries, are in fact the norm. It's so fucked up.

Yes people should be stronger and resist temptation. But they don't. It's like a junk food hit.

Let's not go there. The economy would implode. Many, many unpleasant things will happen. Which we caught a glimpse of during lockdown with supply chains stopping and the economy being switched off and restarted multiple times as if it were a computer

Yes exactly, but we are in fact going there! People's spending power is crumbling.

I guess though that because pensioners pay proportionately less tax and have lower outgoings, they will be the ones keeping the economy from imploding.

Working class women always worked. Who staffed the woollen and cotton mills? Who sewed the shirts in Derry? Who operated the sewing machines at the Dagenham car plants? Who gutted the fish that landed off the Scottish trawlers? Who cleaned schools, offices, shops and hospitals?

Working class women worked. One of my grannies was a cleaner; the othed worked in shops. My great grannies did factory work, farm work or pub work.

Many women had a few years at home with the kids but lots were picking up piece work as and when they could.

I don't think pensioners carry on spending like they are still young. Do they keep bars, cafes, shops, gyms, theatres, cinemas etc going?

Anyway the optics of working age adults working and working with no money to spend on the things that pensioners are enjoying isn't great is it?

Oh I agree. The optics are not good but it’s where things are going at the moment.

The balloon policies being floated out by government via the newspapers to test the waters aren’t going down well. 2p up IT and down for NI, followed by the same proposal plus ‘no NI reduction for those over 50k’ are not going down well.

The only policy that the public, charities and quangoes would agree with is an additonal 2p on employee national insurance - I predict this is what will happen and the disparity in tax treatment will get wose.

They should rename National Insurance. They should call it "An Additional Tax on Employed and Self Employed Adults".

It is basically a punishment on workers. I really do not understand why the public is OK with this - an ordinary waged worker paying 40% more tax than an equivalent pensioner.

It. Is. Shocking.

Why families? Why should families have a lower tax burden than anybody else? Why not single people who proportionately pay more and use less?

Poor you. Boo hoo.

Those with the broadest shoulders should pay the most. Why should a carer on minimum wage fund your comfy retirement.

And don't give me the I worked hard bull. Most people work hard. They just don't earn as much.

Given that state pension is a contributory benefit there is a case for long term SAHPs whose NIC record will fall short having to pay something or not receive the same money as people who have worked and put into the system for all those years. Not saying people shouldn't be a SAHP but if you choose not to work when you're capable of doing so then unless you have private funds there are things you need to consider such as your pension. Obviously if you are ill/disabled/caring for someone (including a child who can't access mainstream school or childcare) etc that is not choosing to stay at home. Similarly if you lose your job and are actively seeking work. Home responsibilities protection absolutely should be given in those circumstances. Maybe even for a few years when the DC are very small. I'm talking about people who opt out of working for years and then expect a full state pension. It would of course be even better if we could afford UBI for all but that doesn't look likely any time soon.

So many people seem to be unaware of this. The decline in spending power has already started and will get a lot worse. It won't be good for anyone.

Thanks for your other sensible posts. Hopefully the victim blaming poster has a slightly better understanding now.

Lots of women, especially working class women, have always worked. My mum did and so did many women. You have heard of mills and factories haven’t you? The cotton industry?

What a nasty post, but sadly typical of some posters on MN, who seem to think their generation is unique in finding bringing up children expensive and paying for the current lot of pensions.

The UK has not prioritised young people or families and instead given money to older generations. However there a huge share of the vote so it's not unsurprising but it's one reason productivity is so low.

Pointing out these facts though means you get accused of ageism.

Here we go yet ANOTHER ageist thread.

Quicker than I predicted!