Should those above state pension age who still work pay National Insurance to fund the NHS?
Bradley Post, managing director at Rift Tax Refunds, says YES.
With 33 per cent of people born today expected to live to 100, and turning 60 hailed as the new “middle age”, it sounds like we’re heading for a Utopian retirement – but there’s a nasty twist.
While life expectancy is rising, healthy life expectancy is not, and National Insurance income is falling, making the ideal of the NHS – that good healthcare should be available to all, regardless of wealth – increasingly difficult to deliver.
Many reaching UK state pension age aren’t retiring. In 1992, just 478,000 (5.5 per cent) of pensioners worked. Now, it’s 1.2m of the UK’s 32.3m workforce – and their National Insurance contributions stopped when they hit pension age.
The “old age dependency ratio” – the percentage of workers to retired people – is predicted to hit 35 per cent by 2030 (up from 27.6 per cent in 2016).
Factor in lower wages and less job security all round, and ending the National Insurance exemption for pensioners may be the only solution to funding the system.
Anna Dixon, chief executive of the Centre for Ageing Better, says NO.
Making workers over state pension age pay National Insurance will raise comparatively little. It certainly won’t meet shortfalls in NHS funding.
True, the change would be unlikely to push workers from employment. Most so-called silver strivers have chosen to continue working, for the additional income or benefits such as maintaining social connections. However, rather than tinkering with older workers’ taxes, policymakers should consider the full range of taxation options available, and tackle growing demand for NHS services by enabling people to age healthily – remaining independent, connected to communities, and physically and mentally active.
Given increasing numbers of workers over state pension age, we need to explore how to help employers take a preventive approach to physical and mental health, and ensure that working carers can continue in employment.
The most important thing is to tackle structural inequalities within generations – not pit them against one another.