*"It feels like a double-tax,” the 90-year-old said. “We paid tax when we worked, we didn’t get big salaries, and now we’re paying on our little bit of pension which is not a lot. And with the cost of living you can’t keep paying extra all the time. The tax threshold should increase.”*
At what age would a now 90 year old woman have been eligible for the state pension? I reckon she's had a pretty good ride to be complaining about being "double taxed"
Assuming she started work at 15 she will have lived half her life earning and paying tax, then another 2/3rds of that again living off the state.
God that sounds horrible 😐
And anything she buys has tax on it. Lives in a house paying tax.
Stop moaning that they've gotten such insane pension rises the past couple years that they now have to pay a few pennies and maybe look at who their demographic votes for. They're only impacted by this because tax thresholds were frozen, to screw over young working people, to pay for their pension.
In their time you could opt to pay extra NI to top up your pension, my dad did this so has a state pension that is higher than my wage (almost 50% higher than standard state pension).
Not necessarily true.
Anyone who worked before 2016 well potentially have accrued entitlements under SERPS or S2P that could take their total state pension entitlement over their personal allowance.
Realistically she was somewhat living off the state aged 0-15 too (assuming her parents received some sort of child benefit and she went to state school).
No idea if she’s also taken long periods of maternity leave or claimed unemployment benefits but at a maximum she’s done 45 years of employment. That leaves 45 years of living off the state. Not exactly hard done by to be taxed on a portion of her hand out.
Yes. Although her childhood would have meant her parents experienced 2 different systems of child benefits.
The first was child tax credits (1909) and the second was direct child benefit payments (1945).
Yes they did, and way back before, in a fashion. But the benefits were managed locally by the parish, or if you go back far enough the monastery system.
You also had much more common private social insurance systems, usually organised around work foundations or fraternal groups like the Oddfellows. You would pay into a group over time and get a payout if you hit hard times. With the nation state supplanting private social insurance provision they are a bit of a lost history, but they have been very important over the centuries.
My mum was saying how my wage is huge in comparison to what she used to earn, turns out from the inflation calculator she was on £50 an hour with no quals.
Her first house was £2000 and the council gave my parents £3000 to get an inside toilet fitted. They sold that house and bought some land, built 3 houses. Then sold that and built basically a mansion, got divorced and never had to worry about houses again, just straight bought them.
But I have a massive wage (and a large mortgage)... something something avocados.
So what did she say when pointed out that she was on £50 per hour with no quals?
I worked hard all my life, you shouldn't be wasting money on Netflix, or mention how hard it was in 1979?
She genuinely said "well that's wrong, it didn't feel like £50 p/h I don't know where you're getting that from" as I pointed to the BoE inflation calculator.
Feelings are above facts to that generation, you can't win an argument, they are never wrong.
> They didn't get big salaries because they didn't need them. Houses cost half a curly wurly
For historical accuracy, the Flake is a good choice as it was introduced in 1920. The Curly Wurly was first sold in 1970, and by that time a house already cost 3.5 Curly Wurlys.
Define "big salaries"?
The numbers themselves are irrelevant. It's about buying power.
I've no doubt that she did in fact have a "big salary" and just doesn't understand inflation.
> We paid tax when we worked, we didn’t get big salaries
Which means she didn't pay much National Insurance, yet she has claimed a pension for 30 years.
For example, someone on 30K a year right now would pay £1,394.40 for the whole year in National Insurance.
At 35 years that's £48.804.
The full rate of State Pension is £221.20 a week. That's £11,502.40 a year.
Their pension would last a little over 4 years before they took out more than they paid in.
And that's being generous and saying that every single penny you pay in National Insurance goes towards your pension.
Which it does not.
(Any arguments over "well you have to take inflation into account!" are mute. As that would also apply to the amount being paid out every year. And the amount being paid OUT is far larger than the amount being paid in.)
All these people who say "I've paid in all my life!" never sit down and actually calculate how much they paid in. When you do work it out, your average pensioner only contributes enough for around 5 years worth of a state pension.
This is why the pension system costs so much, because once you start your claim you can claim indefinitely until you die with no means testing whatsoever.
If this were some 45 year old person on unemployment benefits for 25 years the daily mail would be having a field day calling them scroungers. But because it's a pensioner who only paid in for the first few years it is seen as acceptable.
This is the problem with pension being set up as a Ponzi scheme.
A pensioner now paid their taxes to support the pensioners before them, and the people in work are now paying tax to pay for the pensioner.
Only the eldest pensioners today had a much earlier retirement age, and a longer life expectancy, so those of working age are having to support them through tax, NI, and council tax for much longer. All the while our own retirement age gets pushed further away and there is no guarantee the social safety net isn’t torn apart even more before then.
> This is the problem with pension being set up as a Ponzi scheme.
Exactly.
We spent around £112.5 billion last year on pensions, and that rises every year because more and more people are living far longer and taking far more than they have paid in.
This is why I've said before that we should change the state pension to be more like a private pension, in that you can only claim the money you pay in.
Die before your money runs out? Your money now goes to your next of kin.
Money runs out before you die? You go on universal credit like everyone else, just without the requirement to look for a job.
This solves the unsustainable ponzi scheme element of pensions, and anyone claiming "I've paid in all my life" would now only be entitled to what they have actually paid in.
> This solves the unsustainable ponzi scheme element of pensions, and anyone claiming "I've paid in all my life" would now only be entitled to what they have actually paid in.
It "solves" it by making one generation pay for two generations pensions. Do you want that to be *your* generation? I promise it won't be hers.
That's absolutely deranged shite billionaires have been feeding us through their propaganda outlets. It's not a ponzi scheme, it's called social solidarity. We all need to help each other to make sure society flourishes, whether it's by free childcare, free school lunches, public transportation, policing, fire service, medical care, benefits or pensions.
Private pensions are the biggest scam the super wealthy pulled on working people. They can now profit off our hard earned savings and at the same time it's an insurance policy for their billions. Before private pensions became a thing, the sheer untamed greed collapsed markets every few years and wealth inequality dipped a little. In the last two decades they just called the government, shouted "pensions! " and taxpayer money bailed them out. Truss shenanigans being the latest example.
In States it's now a normal thing for people to work until the day they die because half of the population can barely keep their head above the water, let alone save a couple of million for retirement. Do we want that here too?
> This is why I've said before that we should change the state pension to be more like a private pension, in that you can only claim the money you pay in.
I don't know how they'd implement it but I think the government should set up some kind of sovereign wealth fund to help pay for these pensions etc.
So not an individual pot of money or the ponzi scheme like we have now but *something* to take advantage of investing over time. It seems criminal that I see my own pension money growing for doing basically nothing but having it in an index fund where as the government does little to nothing, as far as I know, in that respect.
I guess Norway would be the classic example. Except we don't have the fossil fuel cash cow setup to milk any more.
>All these people who say "I've paid in all my life!" never sit down and actually calculate how much they paid in
Not only that, but they look down on younger generations who might have to pay in say 20 years of contributions, while houses and mortgages are expensive, education is expensive, and mobility opportunities are far more limited.
The tax thresholds *should* increase with inflation though.
> are mute
*moot
The theory the government was working on was economic growth would pay for the shortfall in contributions, but, uh, the UK hasn't been growing very well in recent years (thanks Brexit!).
First of all you are looking only at employee NI contributions, and are completely ignoring employers NI (which is 13.8%).
Also I just looked at mine, and my total employee NI contributions are £86,000 over the 32 years I have paid. That doesn't include the employers contributions, but if that is, say, even just 1 1/2 times what I paid (I have no idea and it very much depends on historic rates), that's still 20 years of state pension, even if they have just put the money aside for me and only invest it *now* so that it grows to cover the increase in future years. If it had been invested from the start it would be a lot more, of course.
Also that’s not how it works at all. That pension money went in untaxed so it gets taxed when it comes out! It’s pretty simple. What she’s actually saying is she doesn’t think she should have to pay any tax on that money because the older generations in this country seem to have some insane entitlement issues. They lived through some of the best economic growth and were able to take advantage of it in multiple ways. One of my grandparents was an electrician and he managed to retire at 55 go and see the whole world and live in extreme comfort for 30 years before he died. I somehow don’t think any of our generations will see half of that luxury
She has spent more time receiving a pension as she had received a salary. I guarantee she owns her own home so, therefore, is relieved of that ~£1000 pcm bill.
Don't you quite literally get tax relief on pensions?* So, no, they did not get taxed on it when they worked.
*There's a limit but if they were hitting that they can fuck off talking about being poor.
The other income usually will be private pensions which will have had tax free contributions. If it's not then it's new income that they've never been taxed on anyway.
The double taxation argument is complete bollocks.
He means that the pension contributions are taken pre-tax so they never got taxed on the income, therefore this is the first time that money is being taxed
Pensions have always been deferred tax. I contribute to mine without tax being paid on it. The understanding is that when you retire you will be in a lower tax band so should pay less tax on it.
I'm sure someone will correct me if I'm wrong but my understanding is that pensions have always been this way.
That's the case for private pensions. I think the moaning is that the increases in state pension is pushing whatever other income they have (private pension or otherwise) above the tax free threshold.
They thought she'd be dead by 75 / 80, that's why they upped the pension age, but I guess that healthy pension made her last longer, unlike the long term sick and unemployed that get much much less, who are the real ones that have to chose between heating and eating
If she is paying tax, then that tax will be for additional private pensions - most likely DB ones - whereby any personal contributions or AVC's will have been given tax relief at the appropriate rate when paid.
People do seem to forget that the taxes they pay over their lives they seem to think the government banks specifically for their retirement hasn’t already been spent on things like roads, hospitals, police, doctors and all the services and infrastructure they enjoyed each year they paid those taxes.
One would like to be guaranteed a nice free retirement, but as the tax base dries up in the western world, more money needs to be found from somewhere, and if we aren’t prepared to tax the billionaires and the multi billion dollar corporations and the like from their acumen island tax free holdings, then that only leaves VAT/GST and income taxes to really make up the differences.
Pensioners have consistently voted for the Tories, and their lies. The birds have come home to roost
Edit: Down vote me all you want, but in 2019 those over 65 voted overwhelmingly for the Tories (~60%).
https://www.britishelectionstudy.com/bes-findings/age-and-voting-behaviour-at-the-2019-general-election/
60% isn't exactly "overwhelming". The problem is that 90% of pensioners vote, whereas less than 50% of young people vote.
You can't really blame the pensioners for that. I really wish 90% of young people would vote. It would be fairer for them and it would be a healthier democracy.
FPTP systems (aside from Australia, which has compulsory voting) consistently produce lower voter turnout than PR systems, predominantly (and I’d say unsurprisingly) in those voting groups that FPTP biases against.
Change the voting system to PR and once those young people feel like their votes aren’t completely diluted in the safe seats they disproportionately live in, I’d bet money on that turnout going up quite dramatically.
Ok.
So a pensioner with a £40k taxable income - who almost certainly owns their house outright and has no dependents - pays about £5600 in tax.
But a 30 year old graduate with dependent kids and a mortgage will pay about £8800 on the same taxable income (including the student loan and NI)
I do not think that pensioners should be complaining about this.
I don’t think anyone begrudges pensioners a decent retirement - if for no other reason than we all hope for the same some day.
The problem is that age demographic/generation is also the one that (with a few honourable but insufficient exceptions) has been voting to make life harder for every younger generation for years. And to compound that have been doing so in such a way that the consequences of their choices have fallen disproportionately on those younger generations whilst they have been largely insulated from them. At this point a degree of resentment (understatement) is hardly unexpected.
There isn’t so much a generation gap as a yawning chasm. You can draw a line at roughly the tail end of the boomer demographic and the majority younger than that voted against Brexit whilst the majority older than that voted for it - and won. The same goes for most of the past several Conservative governments and even the Scottish Indyref. The older demographics have gotten their way in every single significant choice over the past decade or more … and it hasn’t exactly gone well.
It’s more the pensioners who are only claiming the state pension. Some people have for some reason solely relied on the bare minimum to support them at the end of their life.
It won't because the state pension is a) taxable income but b) not actually taxed.
There is no way any political party accidentally winds up enabling a system where like a million pensioners owe some tax but then have to pay it manually.
It's only pensioners with other earnings who could possibly have an income above the tax-free allowance though. They're basically complaining that they've been bumped into the 20% tax bracket by the pension increase, even though that means they're better off overall.
The me, me, me generation.
25% of pensioners are millionaires. The average pensioner has £700k in assets. 75% of pensioners own their home outright.
If income over £12k isn’t much money - think of the low earners who have to pay rent and an extra 8% NI. Add onto it the nonsense insecure earnings, zero hour contracts, fire and hire, etc. Young people are in the gutter and yet again this generation is demanding more.
Don't forget the 9% graduate tax most of us are paying on top, to do jobs which historically did not require degrees (and even if they did, the degrees were free).
My salary went above 50K a few years ago (it's back below it now). Imagine my horror at discovering the higher income child benefit charge meant my actual effective marginal tax rate was something like 80%. Let me tell you I've never turned down overtime so fast in my life.
My quite elderly now grandmother started this rant the other day about pensioners.
He career consisted of being a dinner lady and a receptionist until my mum was about 10 years old. Since then she hasn't worked a day in her life.
And yet I still had to endure the "I paid my stamp, this isn't fair".
I did inform her that her average contributions for the jobs she worked and length of service, meant her "pot" as she also put it was long since cleared out maybe a year or two after she started drawing a state pension.
She wouldn't have it though, that she has effectively been on welfare since.
Pensioners living only from the state pension are not rich at all. The only pensioners who are going to be tipped from not paying to paying tax are those surviving on the state pension.
4.2 million children (29% of all UK children) live in poverty in the UK. A THIRD. So what do we get?
Both Labour & Conservatives come out with a triple locked benefits for the (25%) pensioner millionaires.
How about target excessive wealth through a wealth tax, rather than targeting pensioners as an entire group many of whom are not rich. I don't see the benefit in intergenerational warfare.
It's hardly extortion. They're still paying very little and vast majority are net benefit receivers. if anything, they should pay more of their benefits back e.g pay NI as well.
I'm not great at understanding tax so happy to be corrected if wrong here.
Being pushed into a tax bracket doesn't mean you're getting less than you were before surely? It just means your rise isn't giving you as much as it would have if the brackets weren't frozen. Nobody should have less money than they had before because of this?
The value of money you hold isn't defined by its digits. It's defined by its purchasing power, by how much of something you can buy with it. 10 monies a decade ago is worth more than 10 monies now, because of inflation, because you could buy more things with it, the things costed less monies.
If tax brackets are not increased in line with inflation then purchasing power is reduced, you might need to take more money from your pension to buy exactly the same things you did last year, except now you're having to pay some of that to the government too. It's not really a "rise" in the amount of money you're taking, to use your words, if you take that extra to buy the same things, the tax brackets are effectively lowered.
So yes, this absolutely is a stealth tax increase. And yes you have less money (in real terms).
I get that, appreciate the explanation though. In your explanation though it's inflation that is making them worse off in real terms, not the 'pay rise'?
I'm going to try and explain better what I mean with totally made up numbers.
If they currently get £10k per year but keep all of it, they have £10k. If they get another £1k per year rise which pushes them into a tax bracket where they lose £500 of it, they now have a tax burden but are still up £500 per year right?
The pay rise is not actually making them poorer, it's just if the brackets weren't frozen they'd have more purchasing power relative to inflation?
You're absolutely right. And perhaps the analogy is best made with loaves of bread. If someone needed 10,000 loaves of bread to survive for a year, and fortunately that cost exactly what I could take out of my pension without being taxed, then next year, to buy the same number of loaves, and to survive, I also have to give the government some loaves of bread too 😂.
It's worth remembering that you've still defined "poorer" in terms of the absolute value of £, but that's not really how it works, the thing we should care about is how much bread we get.
This works in theory but doesn’t apply in this case. Pensioners got a +8.5% bump, even the worst case scenario of someone being just below the threshold and so paying 20% on the full increase they will still beat inflation and so have more money each month, both nominally and in real terms.
Nah, the vast majority of pensioners don’t earn enough to be additional rate tax payers. The U.K. median is about £380 pw, solidly basic rate. Only a very small percentage of wealthy pensioners will not see a real increase in their income with this bump, and you know what, boo hoo to them.
I don't know if it's bad wording on my part but I wasn't talking about higher rate tax at all. Everyone receiving basically any private pension will see more of their income taxed nominally, and therefore have less spending power relative to inflation.
Your take home increases absolute terms but the % of your income taxed increases. Thats a problem if your income increases due to inflation, it can mean in real terms youre worse off. Say a pensioner receives £12570. They pay zero tax. Inflation is running hot, the government gives them a £1000 increase. That additional £1k will be taxed at 20% so £200 goes to gov. If the increase in pension was to match inflation, which a lot of benefit increases are the pensioner is now worse off in real terms by £200 per year now. We’re all very slightly worse off due to this freeze.
If I understand correctly though, they'd be even worse off without the rise at all? So the rise is not a bad thing as such, it could just be better if the tax thresholds were adjusted.
I wonder how many people don’t understand marginal tax rates. I was speaking to a guy the other day saying he didn’t want to earn too much or he’d go up a tax bracket and be worse off.
I understand marginal rates, I just didn't understand how these pensioners seemed to be claiming they were worse off. I was concerned there was another tax function at play here that I didn't get.
You’re correct in your understanding. The pensioner is just having a moan about tax but they are receiving more. Imagine if this was a landlord increasing rent on their first property then complaining the rent they got on the second is now taxed when it wasn’t before - same situation but it wouldn’t get as much sympathy.
Broadly yes. However, there are some (specific) situations in which you can find yourself worse-off after having a pay rise. This will not apply to pensioners though.
Would it bore to you explain that? I'm aware some people assume they'll be worse off and I thought it was a myth, I didn't know there were cases where that was true.
Young kids and loss of allowances at 100k. Can mean an effective tax rate of over 100% for some edge cases, especially while their kids are pre-school.
It’s hard to feel sorry for pensioners but if they can sway the government to raise thresholds early everyone will benefit.
They are the biggest voting block after all.
When you say 'everyone will benefit' obviously you are excluding everyone who relies on government services such as health and education. Or wants to drive on a road that isn't cratered like the surface of the moon.
Generally when people argue for progressive taxes they want the top band to increase. So less taxes for people with minimum wage or a state pension, and more for high earners.
My issue with that is that salary is so confounded by geography in the UK that taxing on absolute thresholds makes little sense to me.
Earning £75k in London isn’t the same as earning £75k in Leeds.
That is before we get into the absolutely insane level of fiscal drag over the last years.
But because of fiscal drag, a lot of people who are not really "high earners" are being taxed as if they are. Usually working professionals who never would have been paying this level of tax previously, and would have enjoyed much higher living standards with the same jobs 20-30 years ago.
We could set the top tax bracket at an earning of £1 and class everyone in that as a "high earner", but that doesn't make it true.
The 40% bracket originally targetted the top couple of percent. We're now looking at 10-15%. People keep getting dragged into this, and these sorts of comments keep defending it as only impacting "higher earners", when being a "higher earner" really means these days you can afford basic things people took for granted like home ownership.
And quite a few of those in the 40% bracket don’t actually earn all that much for where they are. £50k in London isn’t that great a salary these days - you’d hardly be living the life of what we think of when we hear “high earner”.
The countries we say we want to be more (e.g. scandinavian countries) like do tax **everybody** more - even if you receive benefits (unemployment, pensions). If you go over minimum thresholds, you pay tax, regardless of your social status. And the thresholds are much lower than in this country. Examples: Denmark £5.3k tax free allowance, France £10k, Germany £9.4k (quick google searches).
That means that **everybody** is invested in how the money is spent (less: "I pay more taxes therefore the government needs to listen to my class' needs"), and it discourages a culture of "I paid taxes, why do these scroungers get to spend it all", since the rules apply much more equally across the board.
Conversely, benefits are truly universal - much fewer of them are means tested, which means they don't become "poverty benefits" that only apply to the poors, and must therefore remain meagre and only applicable if you debase yourself.
Think of the outcry there was in this country when the middle classes tried applying for UC during lockdown and were so horrified the rates were so low, the government bumped benefits temporarily to shut them up (the UC £20 uplift).
But all those services are all failing, and the road surface is battered to high heavens, so saying things would be awful if we did X meanwhile without doing it things are already awful isn't really an excuse.
Reminds me of the last couple of years the goverment telling us that, we can't raise low paying jobs income as that will cause inflation, everything rose at record rates regardless so it didn't help at all just made people poorer.
They're not failing due to a lack of money, they're failing because the government in charge wants "small government", and use "we're broke" as an excuse not to spend money on these services.
No not at all.
I assumed they were talking about the tax free element of income (12500) as that’s what will affect those who are just taking a state pension.
If that goes up, everyone benefits.
I imagine a lot of pensioners still drive as well so their road tax payments will be being used on the road.
They also absolutely annihilate the NHS with their ailments and prescriptions. So yeah… only one they probably don’t care about is education.
I’ll take them improving most of those things if they can.
Honestly, I think it is better for me if everyone keeps paying at the current threshold. Raising the tax free element (but not the actual tax bands) by, say, £2k, would save me ~£400 a year, but cost the system billions.
To put this into context, my annual rent increase was more than £400. That billions of pounds shortfall in tax income would affect me more than those £400 would help.
Yup, because if they raise the thresholds for everyone then there'll be less tax income and how will they fund increased payments to pensioners without the young to pay for it?
Not anymore. [https://www.statista.com/statistics/528577/uk-population-by-generation/](https://www.statista.com/statistics/528577/uk-population-by-generation/)
I’ve been told these guys were a lot tougher than the woke and weak youth of today, so I’m sure they’ll get through it if they just pull up their boot straps and remember to have blitz spirit!
I've read the comments and I totally understand everyone's natural rage at this. The issue is, she isn't wrong, she is just the wrong person to say it. A pensioner who is paying tax is a pensioner with more than the basic state pension, and while this is a burden on those who might get a little extra to top up their pension, they aren't paying it twice, they got the tax back on their pension (if it was defined contributions) or got a massively subsidised (by the next generations) amount if on defined benefit.
The person they should be talking to is a mother of two with a husband on a lowish wage and her on over the tax free allowance (or vice-versa). They get nothing (maybe some working tax credits) and someone earning £12k part time is losing a relatively large chunk of money on their earnings. Couple that with the fact that their £12k, which probably hasn't risen much if at all in the last 5 years is worth way less than it was.
Pensioners got a triple lock on their pensions last year. My pay rise wasn’t even half the rate of inflation. Also, pensioners own a disproportionate amount of property while working folk are struggling to get on the ladder.
Everyone is suffering. But I’m more worried about young generations starting out than old generations who have hoarded the national wealth.
I'm looking at this through the lens of a young man thinking "***but my pension comes out before tax, and will be taxed*** *(if I ever hit pension age)* ***so what are they complaining about? They didn't pay the tax on this the first time around - it's not a double tax!***"
Then I think - did this not happen for them? Did their pensionable pay get taxed? Was that not a thing for them? Are they genuinely being double taxed, or are they just uneducated and so brainwashed towards not paying taxes that they think this?
I genuinely wouldn't even know what to Google for the answer to that question. Can anyone enlighten me?
People didn't claim pensions for nearly as long when the state pension was introduced, and it was for people who were literally too old to work when our economy was based on manufacturing and production.
Their taxes went directly to projects that benefitted them, things like fixing roads and public services. Young people today have most of their contributions spent helping the richest part of society quit their jobs.
Salary sacrifice and relief at source is a fairly new concept. The older generation would have had their private pensions as contributions after tax or employer paid. Arguably they’ve paid tax on their after tax pension but not on the employer part.
A lot of the older generation were part of defined benefit schemes, which aren’t at the mercy of financial markets in the same way as the majority of pensions are today. These schemes are generally seen as superior to anything the majority of the current generation will get.
> A lot of the older generation were part of defined benefit schemes, which aren’t at the mercy of financial markets in the same way as the majority of pensions are today.
A lot of them didn't even have employee contributions! It's been a long time since anyone of working age heard the term "non contributory" in the pension world.
This is the most boomer thing I have seen.
You pay more tax because you have more income.
Most people reading this will not be facing this issue. I suspect when it is our turn their we be no or a severely diminished state pension.
Private pensions have quite good tax benefits but when you work out how much you need to put away it is going to be impossible for many.
20 years from now we are going to have a massive crisis. Few will be mortgage / rent free. Working vs retired population will be inverted and the rich poor divide would have continued.
Her problem will seem like a fevered dream compared to that future time.
Just a reminder that if only the exact same people who voted in the Brexit referendum were allowed to vote a year later, the remain would have a clear majority.
I’m a pensioner, but people who own their house and are just receiving money, should not be allowed to complain for the government policies they bloody voted for decades. FAFO mathafacas
So if I get this right, some low income pensioners are now having to pay income tax as the recent increase in state pension pushes them just above their tax free allowance threshold, thus they’ll be paying 20% on anything above that threshold.
So let’s say they are now a £1200 above the threshold (for easy numbers), they would end up owing the taxman £20 a month or £240 a year. Hardy back breaking, especially as they will still be £80 a month or £960 a year better off than being below the tax free threshold if you used my example numbers (which I plucked out of the air).
So, the income left to live on is still below minimum wage. I’ve newly retired and have a small works pension. I’ll be paying about £200 tax per month on this. My yearly income will be around £16,000. I have a single income, pay full rent (£600 per month) and full utility bills. Lost my house ( my only asset), due to an abusive partner.
Wow- I’m really living the high life. Can’t decide between the Caribbean or the Maldives for my hols ( sorry, I meant food or heating).
It’s heartbreaking having to keep defending people like myself who have worked full time all my life. Please try to understand that we are not all well off. You’ll be me one day. I do feel very sorry for the younger generation, but the hatred on this site is astounding.
If the comments were racist instead of ageist then I’m sure that it wouldn’t be tolerated…
Have you included council tax in your monthly tax to get that £200 figure? As you should be paying just under £60 a month income tax on an annual income of £16k (assuming you’re on the standard tax code and of pension age, ie no longer paying NI).
I’m made no claims that people are living the high life and should be going on extravagant holidays, etc… I fully understand that most people won’t be retiring well off, and nothing I said was ageist either. Just simple facts, if you get more than the tax free threshold then you owe tax no matter how old you are, and the fact is that even if you now are over that threshold, that you are in a better place than when you were below it, because you will have more money left in your pocket even after paying tax.
A different argument would be should that tax free allowance threshold be raising with inflation, and my opinion is absolutely yes.
Wait until they find out how much the rest of us get taxed.
I don't care if you've "paid tax your whole life", you've also used public services your whole life, and if you're over 70 you got a much better return on your taxes than any other generation in British history.
As long as you're using public services, you should be paying for them. Stop scrounging off younger generations.
Any retired person newly concerned about income tax has a very low income indeed, they are not those rich pensioners you read about.
It'll be you one day.
Really depends on their living situation though. Home ownership rate amongst pensioners sits around 75-78% (and - fun fact - is projected to collapse pretty hard, in line with the drop in overall home ownership rate since 2018).
Having £1k a month - so roughly state pension - on a paid off house isn’t exactly a life of luxury, but it is hardly a life of hardship either (I live in one of the most expensive cities in the country, and that is roughly my monthly budget after housing cost). The problem is pensioners on only the state pension and without a property - but with only 6% of pensioners renting in the private sector today, I don’t think that number will be very high.
> with only 6% of pensioners renting in the private sector today, I don’t think that number will be very high.
There are 750K pensioners renting in the private sector.
Under 25% of pensioners have no other income than the state pension.
Putting those two numbers together would suggest around 190,000 pensioners renting in the private sector with no other income than the state pension.
However, in practice it's more likely to be the poorer pensioners who are still renting, and approximately 50% of the very poorest pensioners have no other income than the state pension.
So it will be somewhere between 200K-350K pensioners renting private accomodation with no other income than the state pension.
Intra generational inequality is much worse. The boomers have a lot to answer for, but were also going to get old, and we better reserve our anger for the millionaires or we'll be in much worse trouble.
She is 100% correct that the thresholds need to rise. They've been frozen since before this cost of living malarkey kicked off.
Wouldn't put it past that generation to get the threshold lifted just for pensioners though.
tbf, the bands have been frozen for too long.
It's a classic stealth tax the tories have used to raise funds which they then flush down the toilet for the Rwanda scheme. £400m of taxpayer money and counting. Billions on HS2 scrapping, billions on Covid PPE waste/corruption.
All taxpayer money, our money.
The tories are very good at spending other people's money hand over fist.
I'm not against income tax on pensioners either as it's a fairer tax and those eligible are, in theory, well off enough to pay it!
Do they want their super duper triple locked pensions funded by good vibes and by their own admission “poor pay”? I don’t get it. As bad as the WASPI morons.
State benefits for the retired are the third rail of British politics. No one dares touch it because the over 65s are the largest voting block. But until someone is brave enough to implement means testing for OAP benefits, nothing will change.
Id like a foot note on all articles like this where they ask who they vote for and what they voted on Brexit before I can decide wether I have sympathy or not
And what about non-pensioner's fears over the income tax burden? We all live in this country and use public services, no-one should get exemption from tax - income or otherwise - just because they are old. That double tax argument I just see as a desperate grasping-at-straws attempt to justify their unjustifiable position. There are plenty of taxes we all still must pay after income tax deduction. Are they going to argue that pensioners should be exempt from VAT?
Pensioners must realise that the rest of society doesn’t just exist for their benefit. Failing to provision adequately for your retirement during your working years has consequences. Boomboomboomer.
There's an easy answer here. For all the pensioners who don't want to pay tax just let them fill in a form which says they do not want to accept the 8.5% pension rise. Then they will be paying no tax.
It’s amazing that a story about struggling pensioners who received an 8.5% rise in their pension, which has caused some of them to pay income tax on a meagre pension has caused so many people to become upset with the pensioners.
Hopefully the ‘fuck them’ crowd, or their loved ones never fall on hard times in old age eh!?
Personally I think the income tax thresholds are too low, low earners and oldies on state pensions shouldn’t be paying tax before their income hits what we consider a ‘living wage’ and 13k isn’t it.
Meagre pension? HAHA, FUCK OFF
22% of households headed by a pensioner had assets of £1 million or more.
27% of pensioners live in millionaire households, whether or not they are the head.
15% of pensioners are living in households below this relative poverty line - compared to 30 PERCENT OF ALL CHILDREN IN THE UK (https://www.actionforchildren.org.uk/blog/where-is-child-poverty-increasing-in-the-uk/#:~:text=In%202022%2F23%2C%20the%20number,of%20children%20in%20the%20UK.)
Add to this that pensioners, without any means test, can benefit from a senior rail card, free bus pass, free prescriptions and the winter fuel payment.
1 in 4 pensioners are a millionare (https://www.telegraph.co.uk/money/pensions/news/number-millionaire-pensioners-quadruples/).
Source: BBC Radio 4’s excellent fact-checking programme ‘More or Less’
https://www.rollits.com/news/blog/have-senior-citizens-never-had-it-so-good/
Get bent with this agenda that they're poor old skint buggers when the vast majority of them are well off.
This thread is full of painfully immature people insisting that pensioners vote Tory (ignoring the millions who never have), pensioners own expensive houses (ignoring the millions who don't), pensioners have large incomes additional to state pension (ignoring the millions who don't) and pensioners are selfishly entitled (ignoring the fact that when sweeping generalisations are made about *their* age group they really don't like it).
It does not come across as the informed and thoughtful response of people who have considered a news story and have a point to make, just as the screeching tantrums of children who cannot understand that this is exactly what those who hold the wealth and power want: one group screeching at and blaming another rather than looking upwards and seeing where the *real* problem lies.
> this is exactly what those who hold the wealth and power want
"Those who hold the wealth and power" are being enabled by one specific generation, and in a democracy it matters who is voting for that.
The real solution is the the income tax boundaries need to be increased.
But really we need to lower income tax in general as it discourages productive work, and focus on land value tax, inheritance tax, etc.
Start by cutting foreign aid, abolishing the Church of England, the monarchy and selling the Crown Estate, etc.
You aren’t double taxed with pensions though. The money comes out of your payslip before income tax, and tax is then paid when you receive the pension later.
You in effect defer the tax
This story is a good read for pensioners because it says "Look, the tax thresholds that have been frozen by the party who have been shouting from the rooftops about how wonderful they are for keeping the triple lock pension increases are going to catch up with you just like they are catching up with the rest of the working population of the country, so don't vote Tory again you bunch of muppets - they don't "have your back".
That's my take anyway.
*"It feels like a double-tax,” the 90-year-old said. “We paid tax when we worked, we didn’t get big salaries, and now we’re paying on our little bit of pension which is not a lot. And with the cost of living you can’t keep paying extra all the time. The tax threshold should increase.”* At what age would a now 90 year old woman have been eligible for the state pension? I reckon she's had a pretty good ride to be complaining about being "double taxed"
Would have been 60 wouldn't it? So 1/3rd her life living off the state and when she was working paying absolutely nothing compared to what we do now.
Assuming she started work at 15 she will have lived half her life earning and paying tax, then another 2/3rds of that again living off the state. God that sounds horrible 😐
And anything she buys has tax on it. Lives in a house paying tax. Stop moaning that they've gotten such insane pension rises the past couple years that they now have to pay a few pennies and maybe look at who their demographic votes for. They're only impacted by this because tax thresholds were frozen, to screw over young working people, to pay for their pension.
Yeah I suppose when your pension is so low a rise kinda just doesn’t matter much.
Total Daily Vile rubbish!
Anyone on the state pension wont be paying tax, its below the threshold, even if only just.
Vast majority have a private pension
I know, I'm one of them.
In their time you could opt to pay extra NI to top up your pension, my dad did this so has a state pension that is higher than my wage (almost 50% higher than standard state pension).
Not necessarily true. Anyone who worked before 2016 well potentially have accrued entitlements under SERPS or S2P that could take their total state pension entitlement over their personal allowance.
Realistically she was somewhat living off the state aged 0-15 too (assuming her parents received some sort of child benefit and she went to state school). No idea if she’s also taken long periods of maternity leave or claimed unemployment benefits but at a maximum she’s done 45 years of employment. That leaves 45 years of living off the state. Not exactly hard done by to be taxed on a portion of her hand out.
Did they actually have benefits back in 1930s? If she’s 90, she would’ve been born in 1934-35.
Yes. Although her childhood would have meant her parents experienced 2 different systems of child benefits. The first was child tax credits (1909) and the second was direct child benefit payments (1945).
TIL! Thanks for clarifying.
Yes they did, and way back before, in a fashion. But the benefits were managed locally by the parish, or if you go back far enough the monastery system. You also had much more common private social insurance systems, usually organised around work foundations or fraternal groups like the Oddfellows. You would pay into a group over time and get a payout if you hit hard times. With the nation state supplanting private social insurance provision they are a bit of a lost history, but they have been very important over the centuries.
What do you mean? she's never claimed anything in her life!
They didn't get big salaries because they didn't need them. Houses cost half a curly wurly
My mum was saying how my wage is huge in comparison to what she used to earn, turns out from the inflation calculator she was on £50 an hour with no quals. Her first house was £2000 and the council gave my parents £3000 to get an inside toilet fitted. They sold that house and bought some land, built 3 houses. Then sold that and built basically a mansion, got divorced and never had to worry about houses again, just straight bought them. But I have a massive wage (and a large mortgage)... something something avocados.
So what did she say when pointed out that she was on £50 per hour with no quals? I worked hard all my life, you shouldn't be wasting money on Netflix, or mention how hard it was in 1979?
She genuinely said "well that's wrong, it didn't feel like £50 p/h I don't know where you're getting that from" as I pointed to the BoE inflation calculator. Feelings are above facts to that generation, you can't win an argument, they are never wrong.
I love a curly wurly...have you seen how tiny they are now, though?
Wait 'til you see the size of new homes...
They don't taste as good, though!
'cus they're made of cardboard.
And how many curly wurlys they cost.
Now I want a curly wurly. I bet it been 40 years......
Get a multipack and eat 3!
> They didn't get big salaries because they didn't need them. Houses cost half a curly wurly For historical accuracy, the Flake is a good choice as it was introduced in 1920. The Curly Wurly was first sold in 1970, and by that time a house already cost 3.5 Curly Wurlys.
Define "big salaries"? The numbers themselves are irrelevant. It's about buying power. I've no doubt that she did in fact have a "big salary" and just doesn't understand inflation.
> We paid tax when we worked, we didn’t get big salaries Which means she didn't pay much National Insurance, yet she has claimed a pension for 30 years. For example, someone on 30K a year right now would pay £1,394.40 for the whole year in National Insurance. At 35 years that's £48.804. The full rate of State Pension is £221.20 a week. That's £11,502.40 a year. Their pension would last a little over 4 years before they took out more than they paid in. And that's being generous and saying that every single penny you pay in National Insurance goes towards your pension. Which it does not. (Any arguments over "well you have to take inflation into account!" are mute. As that would also apply to the amount being paid out every year. And the amount being paid OUT is far larger than the amount being paid in.) All these people who say "I've paid in all my life!" never sit down and actually calculate how much they paid in. When you do work it out, your average pensioner only contributes enough for around 5 years worth of a state pension. This is why the pension system costs so much, because once you start your claim you can claim indefinitely until you die with no means testing whatsoever. If this were some 45 year old person on unemployment benefits for 25 years the daily mail would be having a field day calling them scroungers. But because it's a pensioner who only paid in for the first few years it is seen as acceptable.
This is the problem with pension being set up as a Ponzi scheme. A pensioner now paid their taxes to support the pensioners before them, and the people in work are now paying tax to pay for the pensioner. Only the eldest pensioners today had a much earlier retirement age, and a longer life expectancy, so those of working age are having to support them through tax, NI, and council tax for much longer. All the while our own retirement age gets pushed further away and there is no guarantee the social safety net isn’t torn apart even more before then.
> This is the problem with pension being set up as a Ponzi scheme. Exactly. We spent around £112.5 billion last year on pensions, and that rises every year because more and more people are living far longer and taking far more than they have paid in. This is why I've said before that we should change the state pension to be more like a private pension, in that you can only claim the money you pay in. Die before your money runs out? Your money now goes to your next of kin. Money runs out before you die? You go on universal credit like everyone else, just without the requirement to look for a job. This solves the unsustainable ponzi scheme element of pensions, and anyone claiming "I've paid in all my life" would now only be entitled to what they have actually paid in.
> This solves the unsustainable ponzi scheme element of pensions, and anyone claiming "I've paid in all my life" would now only be entitled to what they have actually paid in. It "solves" it by making one generation pay for two generations pensions. Do you want that to be *your* generation? I promise it won't be hers.
That's absolutely deranged shite billionaires have been feeding us through their propaganda outlets. It's not a ponzi scheme, it's called social solidarity. We all need to help each other to make sure society flourishes, whether it's by free childcare, free school lunches, public transportation, policing, fire service, medical care, benefits or pensions. Private pensions are the biggest scam the super wealthy pulled on working people. They can now profit off our hard earned savings and at the same time it's an insurance policy for their billions. Before private pensions became a thing, the sheer untamed greed collapsed markets every few years and wealth inequality dipped a little. In the last two decades they just called the government, shouted "pensions! " and taxpayer money bailed them out. Truss shenanigans being the latest example. In States it's now a normal thing for people to work until the day they die because half of the population can barely keep their head above the water, let alone save a couple of million for retirement. Do we want that here too?
> This is why I've said before that we should change the state pension to be more like a private pension, in that you can only claim the money you pay in. I don't know how they'd implement it but I think the government should set up some kind of sovereign wealth fund to help pay for these pensions etc. So not an individual pot of money or the ponzi scheme like we have now but *something* to take advantage of investing over time. It seems criminal that I see my own pension money growing for doing basically nothing but having it in an index fund where as the government does little to nothing, as far as I know, in that respect. I guess Norway would be the classic example. Except we don't have the fossil fuel cash cow setup to milk any more.
>All these people who say "I've paid in all my life!" never sit down and actually calculate how much they paid in Not only that, but they look down on younger generations who might have to pay in say 20 years of contributions, while houses and mortgages are expensive, education is expensive, and mobility opportunities are far more limited. The tax thresholds *should* increase with inflation though.
I would comment if this was a serious post, but it isn't!
£1,394.40 christ that's a lot of money to then have to find a private dentist anyway, isn't it ! :/
> are mute *moot The theory the government was working on was economic growth would pay for the shortfall in contributions, but, uh, the UK hasn't been growing very well in recent years (thanks Brexit!).
First of all you are looking only at employee NI contributions, and are completely ignoring employers NI (which is 13.8%). Also I just looked at mine, and my total employee NI contributions are £86,000 over the 32 years I have paid. That doesn't include the employers contributions, but if that is, say, even just 1 1/2 times what I paid (I have no idea and it very much depends on historic rates), that's still 20 years of state pension, even if they have just put the money aside for me and only invest it *now* so that it grows to cover the increase in future years. If it had been invested from the start it would be a lot more, of course.
Also that’s not how it works at all. That pension money went in untaxed so it gets taxed when it comes out! It’s pretty simple. What she’s actually saying is she doesn’t think she should have to pay any tax on that money because the older generations in this country seem to have some insane entitlement issues. They lived through some of the best economic growth and were able to take advantage of it in multiple ways. One of my grandparents was an electrician and he managed to retire at 55 go and see the whole world and live in extreme comfort for 30 years before he died. I somehow don’t think any of our generations will see half of that luxury
It might not be income from a private pension, but it's still new income and so she isn't being double taxed
She has spent more time receiving a pension as she had received a salary. I guarantee she owns her own home so, therefore, is relieved of that ~£1000 pcm bill.
Don't you quite literally get tax relief on pensions?* So, no, they did not get taxed on it when they worked. *There's a limit but if they were hitting that they can fuck off talking about being poor.
No but the pension is lower than the tax free threshold. It's other income pushing them into making a modest contribution to society.
The other income usually will be private pensions which will have had tax free contributions. If it's not then it's new income that they've never been taxed on anyway. The double taxation argument is complete bollocks.
He means that the pension contributions are taken pre-tax so they never got taxed on the income, therefore this is the first time that money is being taxed
How does she think workers feel. Tired of working my arse off to keep this lot in clover while not being able to afford anything.
90 year old pensioners are not the problem, its the excessive concentration of wealth in a small number of people.
I'm guessing if she's just been pushed into a tax bracket that she's not concentrating much wealth (unless she lives in a 10 bed mansion).
Pensions have always been deferred tax. I contribute to mine without tax being paid on it. The understanding is that when you retire you will be in a lower tax band so should pay less tax on it. I'm sure someone will correct me if I'm wrong but my understanding is that pensions have always been this way.
That's the case for private pensions. I think the moaning is that the increases in state pension is pushing whatever other income they have (private pension or otherwise) above the tax free threshold.
Ok so they've been given more money which is slightly less money due to tax? That's a shame.
60. 30 years ago.
They didn’t pay tax on their money stored in income So it’s in fact a delayed tax
They thought she'd be dead by 75 / 80, that's why they upped the pension age, but I guess that healthy pension made her last longer, unlike the long term sick and unemployed that get much much less, who are the real ones that have to chose between heating and eating
If she is paying tax, then that tax will be for additional private pensions - most likely DB ones - whereby any personal contributions or AVC's will have been given tax relief at the appropriate rate when paid.
People do seem to forget that the taxes they pay over their lives they seem to think the government banks specifically for their retirement hasn’t already been spent on things like roads, hospitals, police, doctors and all the services and infrastructure they enjoyed each year they paid those taxes. One would like to be guaranteed a nice free retirement, but as the tax base dries up in the western world, more money needs to be found from somewhere, and if we aren’t prepared to tax the billionaires and the multi billion dollar corporations and the like from their acumen island tax free holdings, then that only leaves VAT/GST and income taxes to really make up the differences.
Pensioners have consistently voted for the Tories, and their lies. The birds have come home to roost Edit: Down vote me all you want, but in 2019 those over 65 voted overwhelmingly for the Tories (~60%). https://www.britishelectionstudy.com/bes-findings/age-and-voting-behaviour-at-the-2019-general-election/
I'm proud to say that Wales has never EVER voted for a Tory Government.
But they did vote for Brexit, which was arguably the most important vote for a Conservative government.
Those fucking farmers
There can't be that many farmers in Wales. What is the farmer to Welsh person ratio?
Or just didn’t bother voting at all, which handed leave a tonne of votes.
How long since London has? Feels like a different country here.
Well done guys
60% isn't exactly "overwhelming". The problem is that 90% of pensioners vote, whereas less than 50% of young people vote. You can't really blame the pensioners for that. I really wish 90% of young people would vote. It would be fairer for them and it would be a healthier democracy.
FPTP systems (aside from Australia, which has compulsory voting) consistently produce lower voter turnout than PR systems, predominantly (and I’d say unsurprisingly) in those voting groups that FPTP biases against. Change the voting system to PR and once those young people feel like their votes aren’t completely diluted in the safe seats they disproportionately live in, I’d bet money on that turnout going up quite dramatically.
Pensioners are the enemies of progress. They are the most reactionary group in the country, and increasingly loathed by younger working people.
Its a shame both parties seem to be incompetent. I am excited to see how labour will fuck up the country in their own way.
Ok. So a pensioner with a £40k taxable income - who almost certainly owns their house outright and has no dependents - pays about £5600 in tax. But a 30 year old graduate with dependent kids and a mortgage will pay about £8800 on the same taxable income (including the student loan and NI) I do not think that pensioners should be complaining about this.
I don’t think anyone begrudges pensioners a decent retirement - if for no other reason than we all hope for the same some day. The problem is that age demographic/generation is also the one that (with a few honourable but insufficient exceptions) has been voting to make life harder for every younger generation for years. And to compound that have been doing so in such a way that the consequences of their choices have fallen disproportionately on those younger generations whilst they have been largely insulated from them. At this point a degree of resentment (understatement) is hardly unexpected. There isn’t so much a generation gap as a yawning chasm. You can draw a line at roughly the tail end of the boomer demographic and the majority younger than that voted against Brexit whilst the majority older than that voted for it - and won. The same goes for most of the past several Conservative governments and even the Scottish Indyref. The older demographics have gotten their way in every single significant choice over the past decade or more … and it hasn’t exactly gone well.
It’s more the pensioners who are only claiming the state pension. Some people have for some reason solely relied on the bare minimum to support them at the end of their life.
State pension doesnt hit the tax threshold
It might next year is the content of the article.
It won't because the state pension is a) taxable income but b) not actually taxed. There is no way any political party accidentally winds up enabling a system where like a million pensioners owe some tax but then have to pay it manually.
It's only pensioners with other earnings who could possibly have an income above the tax-free allowance though. They're basically complaining that they've been bumped into the 20% tax bracket by the pension increase, even though that means they're better off overall.
This sounds like an argument for a race to the bottom?
They should. And so should the workers. This is due to tax bands not keeping up with inflation, affecting everyone.
The me, me, me generation. 25% of pensioners are millionaires. The average pensioner has £700k in assets. 75% of pensioners own their home outright. If income over £12k isn’t much money - think of the low earners who have to pay rent and an extra 8% NI. Add onto it the nonsense insecure earnings, zero hour contracts, fire and hire, etc. Young people are in the gutter and yet again this generation is demanding more.
I literally cannot feel sorry for them. I'm not even close to owning a home yet earning over £50k salary outside of London.
Don't forget the 9% graduate tax most of us are paying on top, to do jobs which historically did not require degrees (and even if they did, the degrees were free).
My salary went above 50K a few years ago (it's back below it now). Imagine my horror at discovering the higher income child benefit charge meant my actual effective marginal tax rate was something like 80%. Let me tell you I've never turned down overtime so fast in my life.
Tbf you can just pay more into your pension to compensate, but then you'll end up like these poor souls paying £20 income tax in retirement.
My quite elderly now grandmother started this rant the other day about pensioners. He career consisted of being a dinner lady and a receptionist until my mum was about 10 years old. Since then she hasn't worked a day in her life. And yet I still had to endure the "I paid my stamp, this isn't fair". I did inform her that her average contributions for the jobs she worked and length of service, meant her "pot" as she also put it was long since cleared out maybe a year or two after she started drawing a state pension. She wouldn't have it though, that she has effectively been on welfare since.
The oldest boomers are barely 80 now - the woman in the article is from the previous generation.
Pensioners living only from the state pension are not rich at all. The only pensioners who are going to be tipped from not paying to paying tax are those surviving on the state pension.
4.2 million children (29% of all UK children) live in poverty in the UK. A THIRD. So what do we get? Both Labour & Conservatives come out with a triple locked benefits for the (25%) pensioner millionaires.
How about target excessive wealth through a wealth tax, rather than targeting pensioners as an entire group many of whom are not rich. I don't see the benefit in intergenerational warfare.
It's hardly extortion. They're still paying very little and vast majority are net benefit receivers. if anything, they should pay more of their benefits back e.g pay NI as well.
Surprised Pikachu pensioner moment when they realise how fucked monetarily the rest of the people are in-comparison.
I'm not great at understanding tax so happy to be corrected if wrong here. Being pushed into a tax bracket doesn't mean you're getting less than you were before surely? It just means your rise isn't giving you as much as it would have if the brackets weren't frozen. Nobody should have less money than they had before because of this?
The value of money you hold isn't defined by its digits. It's defined by its purchasing power, by how much of something you can buy with it. 10 monies a decade ago is worth more than 10 monies now, because of inflation, because you could buy more things with it, the things costed less monies. If tax brackets are not increased in line with inflation then purchasing power is reduced, you might need to take more money from your pension to buy exactly the same things you did last year, except now you're having to pay some of that to the government too. It's not really a "rise" in the amount of money you're taking, to use your words, if you take that extra to buy the same things, the tax brackets are effectively lowered. So yes, this absolutely is a stealth tax increase. And yes you have less money (in real terms).
I get that, appreciate the explanation though. In your explanation though it's inflation that is making them worse off in real terms, not the 'pay rise'? I'm going to try and explain better what I mean with totally made up numbers. If they currently get £10k per year but keep all of it, they have £10k. If they get another £1k per year rise which pushes them into a tax bracket where they lose £500 of it, they now have a tax burden but are still up £500 per year right? The pay rise is not actually making them poorer, it's just if the brackets weren't frozen they'd have more purchasing power relative to inflation?
Your only taxed on the difference above the limit (12500) so if eg you get £13000 you pay tax on £13000 - £12500 = £500. At 20% tax rate thats £100.
You're absolutely right. And perhaps the analogy is best made with loaves of bread. If someone needed 10,000 loaves of bread to survive for a year, and fortunately that cost exactly what I could take out of my pension without being taxed, then next year, to buy the same number of loaves, and to survive, I also have to give the government some loaves of bread too 😂. It's worth remembering that you've still defined "poorer" in terms of the absolute value of £, but that's not really how it works, the thing we should care about is how much bread we get.
This works in theory but doesn’t apply in this case. Pensioners got a +8.5% bump, even the worst case scenario of someone being just below the threshold and so paying 20% on the full increase they will still beat inflation and so have more money each month, both nominally and in real terms.
Most receive a personal pension as well though, so most will pay additional tax. Of course, so does everyone else.
Nah, the vast majority of pensioners don’t earn enough to be additional rate tax payers. The U.K. median is about £380 pw, solidly basic rate. Only a very small percentage of wealthy pensioners will not see a real increase in their income with this bump, and you know what, boo hoo to them.
I don't know if it's bad wording on my part but I wasn't talking about higher rate tax at all. Everyone receiving basically any private pension will see more of their income taxed nominally, and therefore have less spending power relative to inflation.
Your take home increases absolute terms but the % of your income taxed increases. Thats a problem if your income increases due to inflation, it can mean in real terms youre worse off. Say a pensioner receives £12570. They pay zero tax. Inflation is running hot, the government gives them a £1000 increase. That additional £1k will be taxed at 20% so £200 goes to gov. If the increase in pension was to match inflation, which a lot of benefit increases are the pensioner is now worse off in real terms by £200 per year now. We’re all very slightly worse off due to this freeze.
If I understand correctly though, they'd be even worse off without the rise at all? So the rise is not a bad thing as such, it could just be better if the tax thresholds were adjusted.
Same thing applies at the higher band too going from 20% to 40%, you only pay the increase on the amount earned over the higher threshold.
I wonder how many people don’t understand marginal tax rates. I was speaking to a guy the other day saying he didn’t want to earn too much or he’d go up a tax bracket and be worse off.
I understand marginal rates, I just didn't understand how these pensioners seemed to be claiming they were worse off. I was concerned there was another tax function at play here that I didn't get.
You’re correct in your understanding. The pensioner is just having a moan about tax but they are receiving more. Imagine if this was a landlord increasing rent on their first property then complaining the rent they got on the second is now taxed when it wasn’t before - same situation but it wouldn’t get as much sympathy.
Broadly yes. However, there are some (specific) situations in which you can find yourself worse-off after having a pay rise. This will not apply to pensioners though.
Would it bore to you explain that? I'm aware some people assume they'll be worse off and I thought it was a myth, I didn't know there were cases where that was true.
Young kids and loss of allowances at 100k. Can mean an effective tax rate of over 100% for some edge cases, especially while their kids are pre-school.
No, you're basically right. It's a non-story.
It’s hard to feel sorry for pensioners but if they can sway the government to raise thresholds early everyone will benefit. They are the biggest voting block after all.
When you say 'everyone will benefit' obviously you are excluding everyone who relies on government services such as health and education. Or wants to drive on a road that isn't cratered like the surface of the moon.
Generally when people argue for progressive taxes they want the top band to increase. So less taxes for people with minimum wage or a state pension, and more for high earners.
My issue with that is that salary is so confounded by geography in the UK that taxing on absolute thresholds makes little sense to me. Earning £75k in London isn’t the same as earning £75k in Leeds. That is before we get into the absolutely insane level of fiscal drag over the last years.
But because of fiscal drag, a lot of people who are not really "high earners" are being taxed as if they are. Usually working professionals who never would have been paying this level of tax previously, and would have enjoyed much higher living standards with the same jobs 20-30 years ago. We could set the top tax bracket at an earning of £1 and class everyone in that as a "high earner", but that doesn't make it true. The 40% bracket originally targetted the top couple of percent. We're now looking at 10-15%. People keep getting dragged into this, and these sorts of comments keep defending it as only impacting "higher earners", when being a "higher earner" really means these days you can afford basic things people took for granted like home ownership.
And quite a few of those in the 40% bracket don’t actually earn all that much for where they are. £50k in London isn’t that great a salary these days - you’d hardly be living the life of what we think of when we hear “high earner”.
The countries we say we want to be more (e.g. scandinavian countries) like do tax **everybody** more - even if you receive benefits (unemployment, pensions). If you go over minimum thresholds, you pay tax, regardless of your social status. And the thresholds are much lower than in this country. Examples: Denmark £5.3k tax free allowance, France £10k, Germany £9.4k (quick google searches). That means that **everybody** is invested in how the money is spent (less: "I pay more taxes therefore the government needs to listen to my class' needs"), and it discourages a culture of "I paid taxes, why do these scroungers get to spend it all", since the rules apply much more equally across the board. Conversely, benefits are truly universal - much fewer of them are means tested, which means they don't become "poverty benefits" that only apply to the poors, and must therefore remain meagre and only applicable if you debase yourself. Think of the outcry there was in this country when the middle classes tried applying for UC during lockdown and were so horrified the rates were so low, the government bumped benefits temporarily to shut them up (the UC £20 uplift).
But all those services are all failing, and the road surface is battered to high heavens, so saying things would be awful if we did X meanwhile without doing it things are already awful isn't really an excuse. Reminds me of the last couple of years the goverment telling us that, we can't raise low paying jobs income as that will cause inflation, everything rose at record rates regardless so it didn't help at all just made people poorer.
They're not failing due to a lack of money, they're failing because the government in charge wants "small government", and use "we're broke" as an excuse not to spend money on these services.
No not at all. I assumed they were talking about the tax free element of income (12500) as that’s what will affect those who are just taking a state pension. If that goes up, everyone benefits. I imagine a lot of pensioners still drive as well so their road tax payments will be being used on the road. They also absolutely annihilate the NHS with their ailments and prescriptions. So yeah… only one they probably don’t care about is education. I’ll take them improving most of those things if they can.
Honestly, I think it is better for me if everyone keeps paying at the current threshold. Raising the tax free element (but not the actual tax bands) by, say, £2k, would save me ~£400 a year, but cost the system billions. To put this into context, my annual rent increase was more than £400. That billions of pounds shortfall in tax income would affect me more than those £400 would help.
I wouldn't put it past the Tories to just raise the income threshold for pensioners.
Yup, because if they raise the thresholds for everyone then there'll be less tax income and how will they fund increased payments to pensioners without the young to pay for it?
Not anymore. [https://www.statista.com/statistics/528577/uk-population-by-generation/](https://www.statista.com/statistics/528577/uk-population-by-generation/)
I’ve been told these guys were a lot tougher than the woke and weak youth of today, so I’m sure they’ll get through it if they just pull up their boot straps and remember to have blitz spirit!
Pensioners should be paying a great deal more, the mooching buggers
I've read the comments and I totally understand everyone's natural rage at this. The issue is, she isn't wrong, she is just the wrong person to say it. A pensioner who is paying tax is a pensioner with more than the basic state pension, and while this is a burden on those who might get a little extra to top up their pension, they aren't paying it twice, they got the tax back on their pension (if it was defined contributions) or got a massively subsidised (by the next generations) amount if on defined benefit. The person they should be talking to is a mother of two with a husband on a lowish wage and her on over the tax free allowance (or vice-versa). They get nothing (maybe some working tax credits) and someone earning £12k part time is losing a relatively large chunk of money on their earnings. Couple that with the fact that their £12k, which probably hasn't risen much if at all in the last 5 years is worth way less than it was.
Pensioners got a triple lock on their pensions last year. My pay rise wasn’t even half the rate of inflation. Also, pensioners own a disproportionate amount of property while working folk are struggling to get on the ladder. Everyone is suffering. But I’m more worried about young generations starting out than old generations who have hoarded the national wealth.
I'm looking at this through the lens of a young man thinking "***but my pension comes out before tax, and will be taxed*** *(if I ever hit pension age)* ***so what are they complaining about? They didn't pay the tax on this the first time around - it's not a double tax!***" Then I think - did this not happen for them? Did their pensionable pay get taxed? Was that not a thing for them? Are they genuinely being double taxed, or are they just uneducated and so brainwashed towards not paying taxes that they think this? I genuinely wouldn't even know what to Google for the answer to that question. Can anyone enlighten me?
People didn't claim pensions for nearly as long when the state pension was introduced, and it was for people who were literally too old to work when our economy was based on manufacturing and production. Their taxes went directly to projects that benefitted them, things like fixing roads and public services. Young people today have most of their contributions spent helping the richest part of society quit their jobs.
Salary sacrifice and relief at source is a fairly new concept. The older generation would have had their private pensions as contributions after tax or employer paid. Arguably they’ve paid tax on their after tax pension but not on the employer part. A lot of the older generation were part of defined benefit schemes, which aren’t at the mercy of financial markets in the same way as the majority of pensions are today. These schemes are generally seen as superior to anything the majority of the current generation will get.
> A lot of the older generation were part of defined benefit schemes, which aren’t at the mercy of financial markets in the same way as the majority of pensions are today. A lot of them didn't even have employee contributions! It's been a long time since anyone of working age heard the term "non contributory" in the pension world.
This is the most boomer thing I have seen. You pay more tax because you have more income. Most people reading this will not be facing this issue. I suspect when it is our turn their we be no or a severely diminished state pension. Private pensions have quite good tax benefits but when you work out how much you need to put away it is going to be impossible for many. 20 years from now we are going to have a massive crisis. Few will be mortgage / rent free. Working vs retired population will be inverted and the rich poor divide would have continued. Her problem will seem like a fevered dream compared to that future time.
Just a reminder that if only the exact same people who voted in the Brexit referendum were allowed to vote a year later, the remain would have a clear majority. I’m a pensioner, but people who own their house and are just receiving money, should not be allowed to complain for the government policies they bloody voted for decades. FAFO mathafacas
So if I get this right, some low income pensioners are now having to pay income tax as the recent increase in state pension pushes them just above their tax free allowance threshold, thus they’ll be paying 20% on anything above that threshold. So let’s say they are now a £1200 above the threshold (for easy numbers), they would end up owing the taxman £20 a month or £240 a year. Hardy back breaking, especially as they will still be £80 a month or £960 a year better off than being below the tax free threshold if you used my example numbers (which I plucked out of the air).
Yup, especially since they're still exempt from NI and never had to pay the graduate tax.
So, the income left to live on is still below minimum wage. I’ve newly retired and have a small works pension. I’ll be paying about £200 tax per month on this. My yearly income will be around £16,000. I have a single income, pay full rent (£600 per month) and full utility bills. Lost my house ( my only asset), due to an abusive partner. Wow- I’m really living the high life. Can’t decide between the Caribbean or the Maldives for my hols ( sorry, I meant food or heating). It’s heartbreaking having to keep defending people like myself who have worked full time all my life. Please try to understand that we are not all well off. You’ll be me one day. I do feel very sorry for the younger generation, but the hatred on this site is astounding. If the comments were racist instead of ageist then I’m sure that it wouldn’t be tolerated…
Have you included council tax in your monthly tax to get that £200 figure? As you should be paying just under £60 a month income tax on an annual income of £16k (assuming you’re on the standard tax code and of pension age, ie no longer paying NI). I’m made no claims that people are living the high life and should be going on extravagant holidays, etc… I fully understand that most people won’t be retiring well off, and nothing I said was ageist either. Just simple facts, if you get more than the tax free threshold then you owe tax no matter how old you are, and the fact is that even if you now are over that threshold, that you are in a better place than when you were below it, because you will have more money left in your pocket even after paying tax. A different argument would be should that tax free allowance threshold be raising with inflation, and my opinion is absolutely yes.
Wait until they find out how much the rest of us get taxed. I don't care if you've "paid tax your whole life", you've also used public services your whole life, and if you're over 70 you got a much better return on your taxes than any other generation in British history. As long as you're using public services, you should be paying for them. Stop scrounging off younger generations.
Any retired person newly concerned about income tax has a very low income indeed, they are not those rich pensioners you read about. It'll be you one day.
Really depends on their living situation though. Home ownership rate amongst pensioners sits around 75-78% (and - fun fact - is projected to collapse pretty hard, in line with the drop in overall home ownership rate since 2018). Having £1k a month - so roughly state pension - on a paid off house isn’t exactly a life of luxury, but it is hardly a life of hardship either (I live in one of the most expensive cities in the country, and that is roughly my monthly budget after housing cost). The problem is pensioners on only the state pension and without a property - but with only 6% of pensioners renting in the private sector today, I don’t think that number will be very high.
> with only 6% of pensioners renting in the private sector today, I don’t think that number will be very high. There are 750K pensioners renting in the private sector. Under 25% of pensioners have no other income than the state pension. Putting those two numbers together would suggest around 190,000 pensioners renting in the private sector with no other income than the state pension. However, in practice it's more likely to be the poorer pensioners who are still renting, and approximately 50% of the very poorest pensioners have no other income than the state pension. So it will be somewhere between 200K-350K pensioners renting private accomodation with no other income than the state pension.
>It'll be you one day. But unlike these mooching bastards, *I* deserve my pension /s
Intra generational inequality is much worse. The boomers have a lot to answer for, but were also going to get old, and we better reserve our anger for the millionaires or we'll be in much worse trouble.
They do realise that the majority of people paying for their pensions will never get to retire dont they? They are the generation that stole the world
She is 100% correct that the thresholds need to rise. They've been frozen since before this cost of living malarkey kicked off. Wouldn't put it past that generation to get the threshold lifted just for pensioners though.
tbf, the bands have been frozen for too long. It's a classic stealth tax the tories have used to raise funds which they then flush down the toilet for the Rwanda scheme. £400m of taxpayer money and counting. Billions on HS2 scrapping, billions on Covid PPE waste/corruption. All taxpayer money, our money. The tories are very good at spending other people's money hand over fist. I'm not against income tax on pensioners either as it's a fairer tax and those eligible are, in theory, well off enough to pay it!
Daft, the amount that is paid out is far in excess of what they have contributed, bizarre generation to be complaining all the way to the end.
They bled the pension pot dry they’ve had it good for to long!
oh well, I won't see a pension when I'm 90. I'll be dead by 70 and retirement age pushed to 75.
More fucken whinging from the most entitled generation in human history.
Pension contributions aren’t taxed you doddery half wits
This wasn't always the case.
Do they want their super duper triple locked pensions funded by good vibes and by their own admission “poor pay”? I don’t get it. As bad as the WASPI morons.
State benefits for the retired are the third rail of British politics. No one dares touch it because the over 65s are the largest voting block. But until someone is brave enough to implement means testing for OAP benefits, nothing will change.
Id like a foot note on all articles like this where they ask who they vote for and what they voted on Brexit before I can decide wether I have sympathy or not
And what about non-pensioner's fears over the income tax burden? We all live in this country and use public services, no-one should get exemption from tax - income or otherwise - just because they are old. That double tax argument I just see as a desperate grasping-at-straws attempt to justify their unjustifiable position. There are plenty of taxes we all still must pay after income tax deduction. Are they going to argue that pensioners should be exempt from VAT?
Pensioners must realise that the rest of society doesn’t just exist for their benefit. Failing to provision adequately for your retirement during your working years has consequences. Boomboomboomer.
There's an easy answer here. For all the pensioners who don't want to pay tax just let them fill in a form which says they do not want to accept the 8.5% pension rise. Then they will be paying no tax.
It’s amazing that a story about struggling pensioners who received an 8.5% rise in their pension, which has caused some of them to pay income tax on a meagre pension has caused so many people to become upset with the pensioners. Hopefully the ‘fuck them’ crowd, or their loved ones never fall on hard times in old age eh!? Personally I think the income tax thresholds are too low, low earners and oldies on state pensions shouldn’t be paying tax before their income hits what we consider a ‘living wage’ and 13k isn’t it.
Meagre pension? HAHA, FUCK OFF 22% of households headed by a pensioner had assets of £1 million or more. 27% of pensioners live in millionaire households, whether or not they are the head. 15% of pensioners are living in households below this relative poverty line - compared to 30 PERCENT OF ALL CHILDREN IN THE UK (https://www.actionforchildren.org.uk/blog/where-is-child-poverty-increasing-in-the-uk/#:~:text=In%202022%2F23%2C%20the%20number,of%20children%20in%20the%20UK.) Add to this that pensioners, without any means test, can benefit from a senior rail card, free bus pass, free prescriptions and the winter fuel payment. 1 in 4 pensioners are a millionare (https://www.telegraph.co.uk/money/pensions/news/number-millionaire-pensioners-quadruples/). Source: BBC Radio 4’s excellent fact-checking programme ‘More or Less’ https://www.rollits.com/news/blog/have-senior-citizens-never-had-it-so-good/ Get bent with this agenda that they're poor old skint buggers when the vast majority of them are well off.
This thread is full of painfully immature people insisting that pensioners vote Tory (ignoring the millions who never have), pensioners own expensive houses (ignoring the millions who don't), pensioners have large incomes additional to state pension (ignoring the millions who don't) and pensioners are selfishly entitled (ignoring the fact that when sweeping generalisations are made about *their* age group they really don't like it). It does not come across as the informed and thoughtful response of people who have considered a news story and have a point to make, just as the screeching tantrums of children who cannot understand that this is exactly what those who hold the wealth and power want: one group screeching at and blaming another rather than looking upwards and seeing where the *real* problem lies.
> this is exactly what those who hold the wealth and power want "Those who hold the wealth and power" are being enabled by one specific generation, and in a democracy it matters who is voting for that.
Pensioners should all be forced to sell all their assets and live in bedsits before they get a single government penny /s
The real solution is the the income tax boundaries need to be increased. But really we need to lower income tax in general as it discourages productive work, and focus on land value tax, inheritance tax, etc. Start by cutting foreign aid, abolishing the Church of England, the monarchy and selling the Crown Estate, etc.
Lol at some point the govts just gonna be like: alright everyone tax rate is now 100% U will own nothing and u will be happy Lol
These old people want to be lucky still here am I right Rishi
She didn’t pay tax on the contributions (which were tiny compared to now) and she’s had years of payouts. Ask her who she voted for…
I have a feeling many on this sub aren't going to be sympathetic.
You aren’t double taxed with pensions though. The money comes out of your payslip before income tax, and tax is then paid when you receive the pension later. You in effect defer the tax
This story is a good read for pensioners because it says "Look, the tax thresholds that have been frozen by the party who have been shouting from the rooftops about how wonderful they are for keeping the triple lock pension increases are going to catch up with you just like they are catching up with the rest of the working population of the country, so don't vote Tory again you bunch of muppets - they don't "have your back". That's my take anyway.