Should working pensioners pay National Insurance?

Should working pensioners pay National Insurance? A think tank group has called for the government to start collecting National Insurance contributions from working pensioners. Most people who have reached retirement age are currently exempt from making the contributions.

It is an initiative suggested by The Resolution Foundation Intergenerational Commission. The contributions would fund a one-off £10,000 payment to 25-year-olds to help them on to the property ladder, start a new business or improve their career prospects.

The think tank group is chaired by former conservative Minister Lord Willetts. He said, “a new generational contract is needed to tackle the big challenges that Britain faces for young and old, covering a better funded NHS and care system, a radically reformed housing market, and a new citizen’s inheritance to boost the prospects of younger generations.” Foreign Secretary, Jeremy Hunt is considering putting forward a proposal to action this recommendation.

As the cost of living gets higher and life expectancy increases, for many, working past retirement age has become a necessity to boost their income. National statistics gathered in 2017 suggest that just under 1.2 million over the age of 65 are still working. Around 60 per cent of these are working part-time and 40 per cent fulltime. This figure has doubled since 1992.

Mark Abby from The Pension Review Service said “Increasingly, it seems the 65 cut off for retirement is just too soon. Many people like their jobs and want to keep earning. “ he went on to say “Not only should this improve their living standards and pension, it can also boost the economy.”

According to economists at PwC, It’s thought that if the UK employed more older people, it could boost the economy by as much as much as £180billion a year.

Andrew Colyer-Worsell, the Senior Pension adviser from Fix My Pension, said “Going to work into your retirement is a great way to keep active, social and independent. However, it’s good to have the choice of whether to work. Planning for retirement and saving into a personal pension can make working into retirement a choice rather than a necessity.”

Further Reading:
About National Insurance

Top Tips on How to Save for a Happy and Wealthy Retirement.

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