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Tax needs to be rebalanced towards the young | accountingweb
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Boomers shouldn’t get all the tax breaks

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Older people have benefitted from tax advantages and support unavailable to younger generations. The time has come to even things out, says Rebecca Cave.

24th Nov 2022
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The baby boomer generation has enjoyed state support throughout their lives and now they are retired, or retiring, they benefit from tax breaks unavailable to younger people. This needs to change. 

Baby boomers are those born in the UK or USA between 1947 and 1961 (some definitions say 1946 to 1964), so even the youngest are now over 60 or near that age. 

Research by the International Longevity Centre suggests that older people’s wealth is concentrated among those aged between 55 and 65, and those aged 65 to 75 are now the second wealthiest cohort in the UK population. 

However, after the age of 75, median wealth drops significantly, and there are as many as one in six people aged over 65 living in poverty. There are also those who are asset-rich but cash poor, who want to hang on to their assets to pay for care-home fees.

Why is this?

Boomers benefited from the expanding economy in the 1960s to 1990s. Those who went to university emerged largely debt-free, and most students received government grants to cover their living costs. Tuition fees were not charged to students in the UK from 1976 to 1998.

From 1983 to 2000 individuals borrowing to buy their own home enjoyed mortgage interest relief at source (MIRAS), which at its peak applied to interest on loans of up to £30,000 per person.

As a result, in comparison to younger generations, the boomers generally have:

  • More assets – they own their own home and may have inherited assets from their parents 
  • Less debt – mortgage has been paid off, no student loans, have built up investments while stock markets have risen 
  • Better pensions – final salary and possibly index-linked pensions 
  • More disposal income – no mortgage repayments or childcare costs.

Age advantages

The older generation also enjoys the following advantages as they reach state retirement age:

  • No national insurance on pensions or earnings
  • State pension is increased each year by the higher of earnings, inflation and 2.5% (the triple lock) 
  • Free bus travel in most regions
  • Winter fuel allowance.

Burden on the young 

In contrast, younger generations are burdened with:

  • Rising mortgage costs or high rents
  • Childcare costs that can be as much as one parent’s wages
  • Student-loan repayments
  • High-income child benefit charge (HICBC)
  • Expensive commuting to work
  • Caring for their elderly parents.

Finding a solution

There are two sets of problems here: the burdens on the younger generation, and the minority of retired people who are seriously struggling with living costs. In the main, taking advantages away from the old will not help younger people. However, there is a strong argument for charging national insurance contributions on earnings and pensions, irrespective of the age of the taxpayer. 

Support younger families 

Politicians say they want to support younger families, but they rarely take any meaningful action towards it. Policies to help these people could include:

  • Write off student loans for those in shortage jobs, such as social workers, nurses, medics and teachers (see loan reclaim scheme for certain categories of teachers, which could be expanded)
  • Scrap the HICBC, which claws back child benefit from families, and now even applies to some people paying basic rate tax
  • Provide more government-subsidised childcare 
  • Make it easier for employers to provide tax-free childcare.

Tackle issues for older folks

More radically the following policies would help those retired people who really need it:

  • Allow the full personal allowance to be transferred between a couple, so where one person has little or no income (usually the woman) both of the couple’s personal allowances can be fully used. This would also help young families where one parent is unwaged or low-waged. 
  • Expand the married couples’ allowance, which is currently restricted to couples where at least one person was born before 6 April 1935.
  • Require the DWP to pay the right amounts of state pension to women who have been underpaid for years, without further delay. 
  • Provide more sheltered housing and care homes at subsidised price.
  • Fund the NHS to reduce the waiting lists for operations that allow people to retain their mobility, such as for knees, hips and cataracts.

Improve targeted benefits 

There are a number of state benefits designed for the older generation, or for those who are caring for others, that are not always taken up as people don’t realise that they are eligible. These include:

Charities such as Age UK and Citizens Advice do their best to educate those people who contact them, but the government could do more to alert those who qualify that they should claim the available benefits.

 

Replies (80)

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By Paul Crowley
24th Nov 2022 13:27

Always enjoy your articles
A major factor is NI. It has a major impact on those earning below £50K but does not apply to most comfortable people and not all all to pensioners, even if they keep earning
It needs to be merged with tax
HICBC is the most unfair element of the tax system, taxing usually the person who does not receive it.
Independent taxation? HICBC breaks that rule
Trigger point way too low, particularly given that business income can be variable.

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By JustAnotherUser
24th Nov 2022 14:41

Always a chuckle these articles

If the younger generation actually voted, we would see change a lot faster. Can you imagine what policy proposals we would see if those in power were to look into a crystal ball and know with certainty that everyone under the age of 34 was due to vote in the next election

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Replying to JustAnotherUser:
Head of woman
By Rebecca Cave
24th Nov 2022 15:44

Very good point.

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Replying to JustAnotherUser:
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By NotAnAccountant2
24th Nov 2022 17:33

JustAnotherUser wrote:

Always a chuckle these articles

Can you imagine what policy proposals we would see if those in power were to look into a crystal ball and know with certainty that everyone under the age of 34 was due to vote in the next election

There are more people 60+ than there are 18-34 in the UK and that is only going to get worse with time.

It might have been true in the past that the young just needed to get out and vote in sufficient numbers but it's no longer true.

Median age of those old enough to vote is around 50

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Replying to NotAnAccountant2:
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By Postingcomments
24th Nov 2022 20:40

People could do worse than doing a little search on the age demographics of the UK. We (and basically everywhere else) have a growing old population and we don't have the same kind of growth in the working age population.

You might think, "So what?" - and I'd like a smaller population in the UK, so I would, maybe back to 40-50m as it seemed less busy then - but read some articles that consider the ramifications of all this.

Broadly, and not just thinking about this issue, I think the past so many decades have been a bit of a Golden Age, where so many things came together and enriched us all. But not so much going forward. But I don't know.

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Replying to NotAnAccountant2:
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By JustAnotherUser
25th Nov 2022 08:15

Forgive any quick maths but the below should be mostly accurate
2019 had 67% turn out

The total registered electorate was 47.6 million

15.7 m did not vote

18 to 34 /Looks to be 52% turnout

28% of these voted conservative

12.7 million estimated people in the 18 to 34 age group

lets use some basic averages

52% of 12.7 million is 6.1 million missing potential votes
2019 election
365 seats to Tories
202 to labour
win by 163 seats
a swing needed of 82 seats

The overall majority for all seat wins was 8,142,778 votes

The average difference between labour and the Tories votes for or against was

11,414 / 15,611 majority

The top 100 seats with the lowest majority averages were

2018 / 1862 majority

Average votes per seat
49,253

Tell me that young people voting wouldn't change party policy to keep these seats, any seat with just a few thousand more votes is up for grabs

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Replying to JustAnotherUser:
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By NotAnAccountant2
25th Nov 2022 16:37

JustAnotherUser wrote:

Forgive any quick maths but the below should be mostly accurate
2019 had 67% turn out

https://truepublica.org.uk/newsbits/top-10/

https://commonslibrary.parliament.uk/constituency-statistics-population-...

One of the top 10 safest labour seats:

Select "Bethnal Green and Bow".

One of the top 10 safest Tory seats:

Select "South Staffordshire"

Now lets look at the most marginal seats that went to the conservatives:

Bury North, *Kensington, **Bury South, **Bolton North East, Moray, High Peak, **Wimbledon, **Carshalton and wallington, Gedling, Heywood and Middleton, West Aberdeenshire and Kincardine, *Cheltehnam, Winchester, Blyth Valley

I've eyeballed the graphs, not checked the figures (which are available on that page if someone wants to do the real work) but I think the two I've single starred are winnable by the 18-34 vote as they've got a higher proportion of voters of that age range than the country as a whole, the double starred ones are controlled by the 40-50 vote and the rest are weighted to the older population.

For example, the last one, Blyth Valley - 43.1% of the population is aged 50+ while 18.6% is 18-34. There are more people eligible for the state pension (65+) than there are 18-34 year olds!

Do you still think averaging the youth vote across the country is reasonable? Do you think higher youth turnout would significantly affect the result?

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Replying to NotAnAccountant2:
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By JustAnotherUser
28th Nov 2022 07:58

Yes I do

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Replying to JustAnotherUser:
By Nick Graves
25th Nov 2022 13:04

A little disingenuous - one can only vote for two badges on the same uniparty addicted to fiat-money printing and then wondering why the economy is in long-term decline/rapid collapse,

Although many Millennials have been indoctrinated into the Magic Money Tree theory, so will naturally vote for more free lunches. So the uniparty only offers more until its credit card is finally cancelled.

Fiddling with tax rates whilst the country burns is really missing the point, somewhat.

I can only think of one seriously disaffected Joneser who would vote for a party offering the sort of harsh austerity measures, massive deregulation, flat taxes and free-market floating interest rates that would be required to make any real difference...

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Replying to JustAnotherUser:
Ray McCann
By Ray McCann
26th Nov 2022 08:45

The problem with this is it assumes that “the old” are voting to deny “the young”.

Every generation of youth struggles and difficulty in getting on the property ladder is not new and neither are sky high house prices in the south east. When I moved south from Scotland in 1990 the only reason I could afford to do it was the house price recession of the late 1980s and the financial help the Civil Service offered when they transferred you. Even then for the first three years we were overdrawing every month. At the end of that three year period I had the equivalent of a student debt, that it took years to get rid off and I am sure that I am not unique.

Put in simple terms, on London wages, it is still possible to buy a “mansion” in the north and Scotland but that is no use to anyone if your job is hundreds of miles away. We don’t build enough for a whole range of reasons.

So creating division between young and old over tax, pensions, housing or anything else is ultimately damaging and instead we should be looking at how we tax and spend in the 21st Century. We have an obsession with property or more precisely continually rising property and it is that that influences price, how should property be taxed, it’s a mess at present, what about NIC, yes it is not levied on pensions but it’s not levied on investment income either and millions of pensioners live only on State pension although if your only income is the State pension you are not doing much living.

So by all means let’s modernise and change, but let’s not start from the premise that the young are getting screwed, it was ever thus.

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LL
By RickyRoark
24th Nov 2022 17:59

Politics is about punishing your enemies and rewarding your friends. The Conservatives would be foolish to upset their biggest base of support.

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LL
By RickyRoark
24th Nov 2022 18:05

Rebecca, you’re also missing the fact that boomers have had more years alive to earn their money. Of course a 60 year old should have more than a 21 year old. They’ve had 39 years extra to stack their bread.

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Replying to RickyRoark:
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By ColA
25th Nov 2022 10:39

Absolutely true. The ridiculous article ignores the fact that many ‘boomers’ have paid 33% or higher of their incomes in tax/NI & still contribute on incomes over the personal allowance.
All of us have experienced wallet-watering interest rates in the 90s under a previous Conservative Government’s mishandling of the economy.
This bias against the elderly suggests we have merely sat around, congratulating ourselves on our opulence.
I for one worked solidly from the age of 17 in 1965 and full-time until retirement at the age of 72 in 2019 and firmly believe I have earned every £ I now receive in pensions.

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Replying to ColA:
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By Paul Crowley
25th Nov 2022 17:23

You earned nothing as such. Your NI was not put into a ringfenced pension account
You simply paid the pensions of the much less aged people of the time
You are now reliant on current taxpayers to pay your pension
Medical, nutritional, And H&S advances means that just so many people left alive.
That and of course no World Wars.

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Replying to Paul Crowley:
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By ColA
26th Nov 2022 12:53

….and you appear to be incapable of assimilating the whole of that which I had written. Still a taxpayer I contribute to mine & fellow ‘much larger’ state-pensioners.
Blinkered incoherent responses only betray the gullibility of the few.

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Replying to Paul Crowley:
Ray McCann
By Ray McCann
27th Nov 2022 08:22

You are confusing the reality of how the Government uses our tax and NIC revenues with the perception of most people that in paying their tax and NIC they are contributing towards their pension and health care. That is the social contract our tax system depends upon.

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Replying to ColA:
Ray McCann
By Ray McCann
26th Nov 2022 12:38

You are being a little unfair to the article, many of the economic decisions made are made by people who enjoyed mortgage tax relief, non-contributory pensions, free university education and other benefits. Of course it’s not right to simply dump responsibility on “boomers” but nor is it right to fail to recognise the sense of resentment that exists in many quarters at the seeming I’m alright Jack approach to how we resolve our current economic woes.

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Replying to RayM55:
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By ColA
26th Nov 2022 12:56

Not one word of anything I have written portrays an ‘I’m all right Jack’ import.
What incenses me is the allegations from Cave & responders that we sit back in retirement and ignore the fact that working careers of anything between 4 & 6 decades have been instrumental in achieving ‘earned’ pensions.

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Replying to ColA:
Ray McCann
By Ray McCann
27th Nov 2022 08:19

You seem to have missed the point so far as that comment is concerned.

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Replying to RickyRoark:
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By farrcorfe
25th Nov 2022 20:31

I thought that it was a tongue in cheek article at first so I expected the finale to be Rebecca Cave proposing euthanasia for all those over 70 as they have now become a drain on the state. and making retirement illegal. ..... and NI was originally imposed to fund future state pensions and the NHS and sick pay if one was an employee- now it's just another tax. How come the comments section suddenly became a political diatribe? Sound economics vanish once the politicos enter the stage.

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By Hugo Fair
24th Nov 2022 21:56

Fun (and I'll admit to being defined as a 'boomer') - but I don't recognise all the supposed associated 'benefits' by reviewing my history in the light of the above:

* "Those who went to university emerged largely debt-free, and most students received government grants to cover their living costs. Tuition fees were not charged to students in the UK from 1976 to 1998."
But I didn't go to University (and so did not get these free benefits - having no option other than the need to start earning at age 16). And I'm not sure as to why it was deemed sensible to have a target of 50%+ gaining a degree (with the consequent devaluation of the result and massive increase in costs & personal debt).

* "From 1983 to 2000 individuals borrowing to buy their own home enjoyed mortgage interest relief at source (MIRAS), which at its peak applied to interest on loans of up to £30,000 per person."
All true - but given that interest rates were often in double digit territory (my highest being 18%), this tax relief was what prevented mass foreclosures - by reducing the effective rate to a level that would have current mortgagees screaming for mercy.

* "boomers .. may have inherited assets from their parents"
Really? Few people of my generation had property-owning parents (not surprising when you search for the %age of population owning rather than renting in the '30s & '40s).

* "Less debt – mortgage has been paid off, no student loans, (etc)"
No [***] Sherlock. That tends to happen when you've spent 40+ years paying down your debt (and in the case of SL the govt writes it off for you anyway)!

* "Better pensions – final salary (etc)"
Mostly only true for those who've spent the majority of their working life within the Public Sector (and good luck to them) - but for the rest of us we've typically been screuued-over by Govt policies and the avaricious providers (not mentioning Standard Life by name)!

I could go on dissecting the examples given ... although I'm happy to admit enjoying a couple of the "Age advantages":
* "Free bus travel in most regions - and Winter fuel allowance"
... the former was a godsend during the pandemic (enabling me to make countless trips to hospital without having to risk the tube or use unaffordable taxis), and the latter is a nice 'bonus' once a year (as energy prices have generally risen faster than the state pension).

However I'd better stop before I get into the truly contentious areas - such as (of course) feeling for the younger generations and their burdens, whilst noticing that those items are mostly the same now as 25 or 50 years ago.
The exceptions to that are generally the result of Gordon's dedication to a plethora of Benefits which have since been wrapped up in ever more convoluted regulations & controls (for instance the issue with HICBC wouldn't exist if Child Benefit didn't exist).

As so often with these articles the tenor is one of morality/fairness (which is more than merely laudable), but actually veers off into proposals for social engineering - which is fine if you admit to that being the primary purpose of most taxation (unlike most politicians of any hue or leaning).

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Replying to Hugo Fair:
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By Jackson-Scott
25th Nov 2022 09:57

Very well said - I couldn't agree with you more as a 'boomer' myself. I didn't go to university, worked from age 16, had exceptionally high mortgage rates and still have a mortgage as i needed it to buy into my current accountancy practice.
My husband worked 7 days a week to keep a roof over our heads and only now at 66 are we beginning to reap the rewards.
I'll leave it there as well !!!!!

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Replying to Hugo Fair:
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By ColA
25th Nov 2022 10:42

Hear, hear. I agree, even violently.
Cave’s article is adrift & ludicrous.

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Replying to Hugo Fair:
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By Extravision
25th Nov 2022 10:55

Couldn't agree more! Like yourself and Jackson-Scott, as a "boomer" I worked full time from leaving school after A Levels, no uni for me either but studied at night school, fees paid for myself while working full time, but moving jobs frequently to develop my career has now left my pension prospects through the floor, first mortgage in mid 80's with rates in excess of 15%, and neither my parents or in-laws had never owned a home for us to inherit, my region doesn't provide free travel until 65 and, although I need to heat my home like my peers a 3 years older than me, I don't yet qualify for Winter fuel allowances.
I'm not complaining as they were choices I made, given the prevailing circumstances. The generation before us contended with far worse. Maybe the "younger people" just need to realise they aren't the first generation to be facing a challenge- it's just a different set of hurdles and it's up to them to choose whether to go over or around them, instead of expecting someone else to remove them.

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Replying to Hugo Fair:
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By Jimess
25th Nov 2022 11:25

You just said everything that I would have said. Most baby boomers have not had it good at all unless they were very, very lucky. The article also seems to assume that everyone who is a baby boomer is married with a family. I spent over 20 years as a singleton paying a mortgage from a single wage, no additional tax allowances, but I still had to fund a home, and because I went into the mortgage market later in life, I am still funding that mortgage and I have to say that it definitely has not been an easy life. I think the article also makes assumptions that all elderly couples make it through to the end together. Some elderly couples are lucky and spend many years of retirement together, some are not so lucky and when one member of a couple passes away in later life the finances often fall very, very hard on the one that is left. The cost of care in later life erodes any value or savings an elderly couple may have. My parents had to sell their home to fund care home fees and worried themselves silly that the funds would run out due to the cost of the fees. When they passed away the small amount of remaining funds were shared among all of the children and grandchildren and this is more the norm than the exception. It is the lucky few that are the better off pensioners, many are not so lucky. Consider also that many female baby boomers have had to wait an extra five or six years to claim their state pension, at a time when many may need to take time out from work to look after elderly relatives, grandchildren, a poorly spouse or partner, or indeed because of their own health. There are many examples of women pushed into poverty because of the way these changes were introduced. If national insurance is ever levied on pensions, it would simply add insult to injury for many.

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Replying to Hugo Fair:
RLI
By lionofludesch
26th Nov 2022 12:33

Hugo Fair wrote:

* "Free bus travel in most regions - and Winter fuel allowance"
... the former was a godsend during the pandemic (enabling me to make countless trips to hospital without having to risk the tube or use unaffordable taxis), and the latter is a nice 'bonus' once a year (as energy prices have generally risen faster than the state pension).

It's nice that the Winter Fuel Allowance arrives just in time to stock up on Christmas drinks. Although this year's enhanced allowance may be over the top, even for us.

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Replying to Hugo Fair:
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By SimonBlackham
26th Nov 2022 16:50

Free bus travel is useful where it is useable.
Live in the country where there are two journeys a day by the town bus ... leaves town at 8am - returns through your village at 10am getting to town by 12pm ... the afternoon bus leaves at (say) 2pm.
So you can have one round trip a day with two hours in town for (say) your hospital appointment ... which will never be between 12 and 2 and would not take less than two hours anyway.

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Replying to Hugo Fair:
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By Jackie UK
28th Nov 2022 12:53

Hugo I totally relate to all you say as most has been exactly the same for me. Can I just add as a lady of that generation, I stayed at home and looked after my children while starting up my accountancy practice that I grew as they got more independent. We didn't expect child care on a plate, we made do on one salary, that said I wouldn't have change my time at home with my children for anything it was great :). Having been self employed now for 30+ years there are certainly no final salary pensions coming may way!

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By Self-Employed and Happy
25th Nov 2022 09:49

I have always thought as Pensioners are living much longer NI needs looking at again.

It won't be a vote winner which is why it'll never happen as the grey vote is at times a protected species, I personally would say anyone over State Pension age should be assessed for NI on ALL of their income (inc Dividends etc) BUT that they get a higher NI Threshold than everyone else (lets say £15k).

Governments simply don't have the strength of character or spine to make actual tough decisions, so we'll be left chasing our tails and paying huge interest on our nations debt for the rest of our lifetime.

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By meadowsaw227
25th Nov 2022 09:51

Presumably the "expanding economy" in the 60`s to 90`s was down to the "baby boomers" working long hours etc and not spending lots of extra years in education or coming out of Uni with a dodgy degree and big debt .

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By Aprid
25th Nov 2022 09:56

One day someone will have the stomach to scrap NICs all together. Long past its sell by date and causes no end of issues including the ones mentioned in this article.

Massively over complex with countless rates and thresholds. Some of which I had never even heard of before checking (FUST anyone?)

Lets call it what it is, Tax, and just incorporate in the rates, rules and allowances we already have.

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Lone Wolf
By Lone_Wolf
25th Nov 2022 10:04

Logan's Run anyone? Increase the age to 65...

I'm joking! I'm joking!

Psst. I'm not joking ;)

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Replying to Lone_Wolf:
By Nick Graves
27th Nov 2022 13:24

Lone_Wolf wrote:

Logan's Run anyone? Increase the age to 65...

I'm joking! I'm joking!

Psst. I'm not joking ;)

You're not - a lot of the Powers That Ought Not Be seemed to think that film was a documentary.

Like 1984 isn't actually an instruction manual....

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By rdstreet
25th Nov 2022 10:07

There are a lot of unhappy boomers on the replies above who really don't get how lucky they have been. Period.

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Replying to rdstreet:
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By ColA
25th Nov 2022 10:44

…and there are a lot of naively gullible who clearly were clueless at the issues of existing in the labour market in the 60s, 70s, 80s & 90s.

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Replying to rdstreet:
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By meadowsaw227
25th Nov 2022 10:54

I'm certainly not unhappy just smiling at your comment dripping with jealousy and envy both of which are character traits not conducive to you being happy.
Period.
Have a nice day ! .

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Replying to meadowsaw227:
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By ColA
25th Nov 2022 12:48

Jealousy, not in the slightest! - dream on.
The sentiment is entirely yours - unhappy, really?
Psychological projection is something to be mightily aware of!
Just to underline - I may well just have added ‘clueless’ to naive and gullible.

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Replying to ColA:
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By Paul Crowley
25th Nov 2022 17:35

Did you get confused?
The reply to the poster dies seem .........strange

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Replying to Paul Crowley:
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By ColA
26th Nov 2022 12:59

Address the confusion to ‘rdstreet’…..
Risible!

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Replying to rdstreet:
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By lionofludesch
28th Nov 2022 13:10

rdstreet wrote:

There are a lot of unhappy boomers on the replies above who really don't get how lucky they have been. Period.

There are a lot of unhappy millennials who are beginning to understand how difficult it was to buy a house with a 15% mortgage.

Every generation has its problems. Try not to increase your own.

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By richards1
25th Nov 2022 10:14

One thing you didn't mention is taxing the CG on homes. That would raise considerable tax and even up the age divide. In addition I would include any disposal whomever makes it private or corporate

I agree with NI on earnings regardless of age.

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By listerramjet
25th Nov 2022 10:17

It is a mistake to look for logic or fairness in the tax system. But what we should all be shouting for is a much simpler system which take into account the realities of life. Pensionsers may be asset rich, to the extent they have made investments through their working life, but for most this is no more than a home and a pension. And it is easy to pick up things in isolation and out of context - such as student loans (thanks to Mr Blair and his failed social engineering). But the fact is that pensioners with a pension income are likely to be paying income tax, just as the younger generations are.
So we should be challenging government and parliament to take two simple steps. One is simplification of tax. Scrapping those that yield little, and making the rules for those that remain easier to understand. The other is to roll back that which government does to things it should be doing. Which in simple terms is policy, rather than execution. There is no particular reason for it to get involved in running trains, hospitals or schools, for example. And there can be no justification for it subsidising some of the arts, culture, sport and media.

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By SimonBlackham
25th Nov 2022 10:34

This all points to there being something wrong with the economy now due to Government mis-management.
Get everyone to go to University (Tony Blair) at great ongoing cost to themselves even if they wanted to be a craftsman or plumber etc. and didn't want or require a University education.
PS I was on a (Mech Eng) sandwich course and received a grant for my first term only.

A quick example (amongst many) is Nursing and the implementation of Nurse2000 ... all the trainee nurses disappeared from the wards so they could start at university ... not knowing 'till later that they couldn't hack it on the wards ... so dropped out. Hence the step function in Nurse shortages at that time.

PS my wife is a now retired Nurse, Midwife then Practice nurse ... so I saw the effects firstish hand.

Note that it is possible that the state pension will be taxed from next year after the 10.1% rise without a matching rise in the personal allowance. It will confuse many people when they get demands that they fill in Tax Returns because their meagre investments and the state pension will now require a Tax to be paid ... with lots more work for HMRC to do and get wrong! ... especially with their now predatory attitude to tax gathering and 'statutory' fines!

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Replying to SimonBlackham:
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By ColA
25th Nov 2022 10:46

As a point of fact the State Pension IS taxed now, merely that there is currently no mechanism to collect the tax directly.
My Income Tax returns trigger the necessary tax code clawback.

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Replying to ColA:
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By Paul Crowley
25th Nov 2022 17:40

I think you missed the point
Loads more people need to submit returns

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Replying to Paul Crowley:
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By ColA
26th Nov 2022 13:00

You are getting tiresome with your facile responses.

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Replying to ColA:
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By SimonBlackham
26th Nov 2022 15:54

But if you are not employed the tax code cannot claw back unpaid tax!

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Replying to ColA:
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By SimonBlackham
26th Nov 2022 16:57

Sorry ... didn't respond in order as the email notifications were cocked up!

Tax code useless for those with no employment and no other pension(s) to provide excess tax at source for HMRC to hold on to!

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Replying to SimonBlackham:
RLI
By lionofludesch
26th Nov 2022 12:36

SimonBlackham wrote:

Note that it is possible that the state pension will be taxed from next year after the 10.1% rise without a matching rise in the personal allowance.

Please tell me that you knew the state pension is - and always has been - taxable.

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Replying to lionofludesch:
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By Hugo Fair
26th Nov 2022 13:29

The 'interesting' point (which I presume was the intended one) is that there is no mechanism for deducting Tax at source (a la PAYE) from DWP's payments of SP.
So we are now approaching the point where someone whose only income is SP *may* have to complete a tax return (or whatever it has transmogrified into by then). Madness!

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