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?

What do families have to do with your point?

People without families work just as hard as people with families.

Maybe we should stop funding childcare then to make it really fair. Pensioners never had tax payers money funding childcare.

Because fewer mothers worked and don't forget there was far more social housing.

Pensioners are exempt because they have paid the max allowance to receive these benefits in old age.

It doesn't stop when you pay the max number of years though

As pp said scrap NI and roll it in with income tax.

I can because I was a single parent. No choice, not that many of my generation could afford for one parent to stay at home anyway.

Fair point.

God. How far back are you going for that to be true?
We are pensioners. Dh worked full time and in the early years I became a child minder and then worked opposite hours to dh. I was a sahm for 3 years. We didn't have a holiday until youngest was 5 and that was a caravan in Wales. Please don't believe the myth that we had it easy. We didn't.

Families get so much more today than I got when I had my first child in 1993.
Would you like to go back to the days of six weeks at 90% pay maternity leave followed by 12 weeks at SMP? Or no flexible working? Or no subsidised/free childcare?
Younger parents are so quick to jump on everything they think pensioners get, but forget - or ignore - that they have had hardships too. And of course, when it is suggested they may like to pay into a pension so they can have the comfortable retirement they so resent the so-called boomers for, they also think they are uniquely placed in struggling to find the money to do so.

I think maybe if people stopped frittering and spending money on endless tech, frequent expensive holidays, take aways, coffees, nails, new cars etc ( all things older generations managed to do without)they may find children far more affordable.

Yes, it's nothing to do with housing costs and wage stagnation 🙄

I didn’t go out work when our kids were young (30 and 22 now) because my husband worked away from home a great deal but I hosted sixth form students. Most mothers we knew worked at least part time, many full time in professional careers. Nursery fees were huge then, too.

I agree we need to abolish NI snd tax income fairly.

NI is paid towards earning a state pension and provides working age benefits.
Why should pensioners still pay NI once they've paid the required years and are no longer entitled to the benefits NI provides.
Current pensioners didn't constantly moan whilst they were working about what previous pensioners were paying in tax - most of them raised their kids without the tax credit/UC largesse of today - no working 24 hours and being topped up by the state back then.
Perhaps if we stop subsidising young families to not work we can all pay less tax/NI

@MrsSkylerWhite i'm talking statistically though?

National insurance makes you eligible for in work benefits as well as a state pension. By default when you get to state pension age, you are no longer eligible for those in work benefits even if you are still working. Hence NI only being payable by those under state pension age.

I think there are greater issues with those choosing not to work and the self employed avoiding paying NI rather than a cohort of pensioners who have paid it during their working lives.

Yep, any excuse on here.

Quite.

I don't know anyone who could afford to be a SAHM in the 70s, 80s or 90s. Tbh there wasn't any childcare for much of it. My mum used to leave us at home alone to go to work with the neighbours keeping an eye out. My sisters and I broke into (and out of) our home everyday because mum locked us out while working. We did walk to school on our own at 5 years old too.

You've watched too much TV. Working class women have always worked. The SAHM mum is a myth unless you were middle class.

It’s going to happen, they will abolish NI but they’ll do it by gradually adding to income tax. Employers will still be left with a NI bill. People should be taxed equally.

No we just didn't have the money available to spend.

Families get so much more today than I got when I had my first child in 1993.

Do they @Katypp? Child benefit was universal then wasn't it?

Would you like to go back to the days of six weeks at 90% pay maternity leave followed by 12 weeks at SMP?

I had my dc in the 00s and it wasn't that different to the above. I only got the "free" hours for a little bit.

Younger parents are so quick to jump on everything they think pensioners get, but forget - or ignore - that they have had hardships too.

I think you are confused, pointing out government policy has made pensioners richer and younger people poorer doesn't mean no pensioner is in poverty or experienced hardship. Why would you conflate the two?

And of course, when it is suggested they may like to pay into a pension so they can have the comfortable retirement they so resent the so-called boomers for, they also think they are uniquely placed in struggling to find the money to do so.

But private pension schemes are not as generous now & state pension age has increased despite no increase in healthy life expectancy so how can it be the same?

@NamelessNancy great graph, it will get ignored though.

But women did work , however if they hadn’t worked and contributed they would still get state pension

I don’t think this is the best example of problems in the uk tax structure. Reducing taxes on pensioners is a structural design.

look at things like how 2 parts of a couple can earn 99k, but if one person earns 101k, the tax rules change entirely. These are ways tax laws hurt working families.

When was this?
Social housing hasn't been plentiful since the 1960s. Both my parents grew up in postwar council houses but, when they married in the mid60s, found that waiting lists in London were years long. They were living in one room in an HMO for the first couple of years of married life, both working double shifts to save a deposit. Were they alive now, both would be in their 80s.

Plenty of people who are now pensioners are 20 years younger than my parents would be. They (soon to include me) grew up watching all the social housing being sold off while we were still at school. We bought houses with 100% mortgages and watched prices tumble, living in negative equity for years.

Lots of people on this thread have a very odd idea of when "pensioners" were young.

You did have it easier, as did I when my now adult children were younger. I had no UC or childcare paid for (as is the case for most parents today) and had hardly any maternity either. But still, we had disposable because mortgage, transport costs, taxes, council tax, energy bills and food costs were not as high compared to wages as they are today. Our children are earning exactly the same wages as I did all those years ago and yet their outgoings, including taxes (because they keep on being hoiked up) are much higher. Yes, they get a coffee, but what do you expect of a generation that has given up hope of affording a house or to have children? I despair at the tin-eared approach of the older generation.

The fact is, even without inflation eroding away wages, younger workers pay 40% MORE tax than pensioners. The disparity has never been so stark between generations or when compared to other civilised countries.