The Lemon Fool

UncleEbenezer wrote: And I speak as someone who, though having paid NI for many years, no longer stands to benefit personally from reducing it.

Well, I'm not sure about that, as a pensioner you may soon be paying NI contributions, your Government needs YOU.

UncleEbenezer wrote:

tjh290633 wrote:In that case it might be a good idea to point out that the Chancellor's idea of reducing NICs only benefits those in work.

..I speak as someone who, though having paid NI for many years, no longer stands to benefit personally from reducing it.

If you receive dividends you are paying 1.25% NI, by any other name.
Fat chance of that being removed.
Another 'middle class' problem, of course.

V8

Nimrod103 wrote:

UncleEbenezer wrote:Rewarding hard work is a Good Thing. Penalising it over and above tax rates on the unproductive is downright evil.

If he can afford tax reductions (which of course he can't, except as a poison pill for the next government), reducing NI is probably the single fairest thing he can do. And I speak as someone who, though having paid NI for many years, no longer stands to benefit personally from reducing it.

It isn't fair at all. National Insurance arguably is the one hypothecated tax, the payment of which roughly determines the amount of state pension one receives. There is currently a big argument about how the country can afford paying a generous state pension to a rising number of retirees. There are a very large number of retirees who receive a state pension far in excess of the (actuarially adjusted) payments they made during their working lives. Reducing NI just increases that number of freeloaders.

So pensioners should just get given the returns their actual NI contributions would achieve?
Sounds fine, but I don't think it's a vote winner

If pensioners didn't buy so many expensive coffees they wouldn't need a tax cut.

MrFoolish wrote:If pensioners didn't buy so many expensive coffees they wouldn't need a tax cut.

Nimrod103 wrote: There are a very large number of retirees who receive a state pension far in excess of the (actuarially adjusted) payments they made during their working lives. Reducing NI just increases that number of freeloaders.

I guess I am one of those freeloaders because I retired quite young and in fact I had to buy ten of my thirty years of contributions in order to get a SP that is above the new "maximum" state pension.

But isn't it smart to stop working once your NICs no longer get you anything? And do we wish to discourage smartness in this country?

I did read the article cited by CK and have to say that I thought it was just more Guardian scaremongering of the "isn't it awful?" style of journalism that The Guardian so excels at.

Lootman wrote:

Nimrod103 wrote: There are a very large number of retirees who receive a state pension far in excess of the (actuarially adjusted) payments they made during their working lives. Reducing NI just increases that number of freeloaders.

I guess I am one of those freeloaders because I retired quite young and in fact I had to buy ten of my thirty years of contributions in order to get a SP that is above the new "maximum" state pension.

But isn't it smart to stop working once your NICs no longer get you anything? And do we wish to discourage smartness in this country?

I think I mentioned this on these boards a while ago. I'm 56 and I have qualified for my maximum state pension....yet I still have to pay.

Maybe it's best to keep on working for a few more years.....just to put a few more in the bank in case the bastards change the rules.

Tedx wrote:

Lootman wrote:I guess I am one of those freeloaders because I retired quite young and in fact I had to buy ten of my thirty years of contributions in order to get a SP that is above the new "maximum" state pension.

But isn't it smart to stop working once your NICs no longer get you anything? And do we wish to discourage smartness in this country?

I think I mentioned this on these boards a while ago. I'm 56 and I have qualified for my maximum state pension....yet I still have to pay.

Maybe it's best to keep on working for a few more years.....just to put a few more in the bank in case the bastards change the rules.

Sure, I was just looking at it purely from a NIC and SP perspective.

In particular the ability to buy back years, with just a 3 year payback period, is a great deal. I guess someone who is rich enough to never work can voluntarily buy NICs every year for 30/35 years and still get a full SP. And the poor sods who work for 50 years do not do any better.

Tedx wrote:I think I mentioned this on these boards a while ago. I'm 56 and I have qualified for my maximum state pension....yet I still have to pay.

Maybe it's best to keep on working for a few more years.....just to put a few more in the bank in case the bastards change the rules.

If you stop working you won't have to pay NI. I took myself out of income tax ages ago but the only way I found to dodge NI is to labour at a really low rate of pay and/or not very often. I agree, there is a risk being a decade from claiming your SP they might change the rules. You can get credits though. I have been making pensions plans for decades and those best laid in 1960 wouldn't stack up in 1980 and so on - guessing the best plan to make today for you NI contributions for a 2036 state pension is pointless. Isn't the qualifying years number now lower than ever. Triple lock of wages, inflation or 2.5% it's bloody excellent - except it's nowhere near enough money. Who fancies living on £10k a year tax free? So make your best provision based on a chance of getting the SP but don't count on it. Do that and NI, SP, income tax allowances, 25% tax free are cherries not cake.

kempiejon wrote:

Tedx wrote:I think I mentioned this on these boards a while ago. I'm 56 and I have qualified for my maximum state pension....yet I still have to pay.

Maybe it's best to keep on working for a few more years.....just to put a few more in the bank in case the bastards change the rules.

If you stop working you won't have to pay NI. I took myself out of income tax ages ago but the only way I found to dodge NI is to labour at a really low rate of pay and/or not very often. best provision based on a chance of getting the SP but don't count on it. Do that and NI, SP, income tax allowances, 25% tax free are cherries not cake.

Another idea is to take a job overseas, once you "max out" your UK SP entitlement.

No NICs obviously. You may have to pay into that country's equivalent system, but then you may get a second pension from them too.

tjh290633 wrote:In that case it might be a good idea to point out that the Chancellor's idea of reducing NICs only benefits those in work.
TJH

and speaking of NICs reductions...

This NIC cut will cost £10.4bn
52% will go to the richest 20% - those earning over £60,000.
3% will go to those earning £21k or less.


(usual caveats, DYOR etc)

kempiejon wrote:
If you stop working you won't have to pay NI.

Is that really true? As a self-employed bod will I not continue to pay NI on my rental income if I close down my boiler repair business?

didds wrote:

tjh290633 wrote:In that case it might be a good idea to point out that the Chancellor's idea of reducing NICs only benefits those in work.

and speaking of NICs reductions...

This NIC cut will cost £10.4bn
52% will go to the richest 20% - those earning over £60,000.
3% will go to those earning £21k or less.

(usual caveats, DYOR etc)

Isn't it almost inevitable with any tax cut that the biggest benefit goes to those who pay the most tax?

And shouldn't it?

Mike4 wrote:

kempiejon wrote:If you stop working you won't have to pay NI.

Is that really true? As a self-employed bod will I not continue to pay NI on my rental income if I close down my boiler repair business?

There are no NICs on rent, nor on any other type of investment income, thank God.

Lootman wrote:Isn't it almost inevitable with any tax cut that the biggest benefit goes to those who pay the most tax?

And shouldn't it?

i think the answer to that second question may well depend on one's personal politics. Particularly if ones perception is the impact of that 10.4 Bn cut in public revenue will be seen at those lower earners.

Others MMV

Mike4 wrote:

kempiejon wrote:
If you stop working you won't have to pay NI.

Is that really true? As a self-employed bod will I not continue to pay NI on my rental income if I close down my boiler repair business?

I dunno but assuming you continue to be self employed isn't there a liability? There are other ways to avoid paying NI, being disabled, incarcerated, leaving the country. In my experience giving up employment has worked. I suppose I used the term working without thinking about the nuances.

kempiejon wrote:I dunno but assuming you continue to be self employed isn't there a liability? There are other ways to avoid paying NI, being disabled, incarcerated, leaving the country. In my experience giving up employment has worked.

Another popular way of getting excused National Insurance contributions is to reach the state pension age.

BJ

bungeejumper wrote:

kempiejon wrote:I dunno but assuming you continue to be self employed isn't there a liability? There are other ways to avoid paying NI, being disabled, incarcerated, leaving the country. In my experience giving up employment has worked.

Another popular way of getting excused National Insurance contributions is to reach the state pension age.

BJ

Good catch, the beginning of my response was having already built up enough NI credits for a full state pension but being made to still pay into it while employed, your plan works too well spotted.

didds wrote:

Lootman wrote:Isn't it almost inevitable with any tax cut that the biggest benefit goes to those who pay the most tax?

And shouldn't it?

i think the answer to that second question may well depend on one's personal politics. Particularly if ones perception is the impact of that 10.4 Bn cut in public revenue will be seen at those lower earners.

Others MMV

If you increase the starting point for Income Tax, rather than reduce the rate, the biggest proportional benefit will accrue to those just on the cusp of paying income tax, which will include part-time workers and pensioners.

TJH

Another aspect of the tax system which irks me is the way double taxation works against us. With IT and NICs they are both calculated Gross so they don't net off each other (NIC isn't a deductible expense for IT and vice-versa); yet with sales taxes they do net together and accumulate (so VAT for example is calculated after fuel duty or alcohol duty is added). This is a bit stealthy and rarely gets an airing in the media unfortunately.

MuddyBoots wrote:Another aspect of the tax system which irks me is the way double taxation works against us. With IT and NICs they are both calculated Gross so they don't net off each other (NIC isn't a deductible expense for IT and vice-versa); yet with sales taxes they do net together and accumulate (so VAT for example is calculated after fuel duty or alcohol duty is added). This is a bit stealthy and rarely gets an airing in the media unfortunately.

Yes this too, no matter how it is still netted together