An extraordinary anomaly currently exists in the UK tax system. There is a serious imbalance in the tax treatment of UK workers who belong to different age groups. People who work beyond their state pension age become exempt from paying National Insurance contributions, a tax break which the Intergenerational Foundation believes has now become impossible to justify in light of socio-economic changes which have occurred over recent years.
This paper outlines several reasons why workers over state pension age should start paying National Insurance contributions, as all other workers do:
- There are 1,200,000 people working over state pension age;
- Lots of people stay in the same job, to whom the current exemption comes as an unexpected and unneeded pay rise;
- At least £1.5 billion extra National Insurance revenue could be raised annually;
- Older people would benefit if these extra NICs payments were set aside as much-needed funding for social care.
This paper lists those public figures from across the political spectrum who have called for older workers to contribute the same level of National Insurance.