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An Extraordinary Anomaly: Why workers over state pension age should pay National Insurance

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.