New call to scrap National Insurance deductions for older people in work
A new online petition is calling on the UK Government to scrap National Insurance contribution deductions for workers over the age of 60. People automatically stop seeing NICs deducted from payslips when they reach State Pension age, which is currently 66, but set to rise to 67 over 2026 and 2028.
However, petition creator Mike Haynes argues making workers over 60 exempt from paying National Insurance would 'make it easier financially for older people to survive'.
He added: 'We are calling for this as many over-60s are struggling to survive due to what we believe has been incompetent government spending over the past 30 years.'
The 'exempt workers over 60 from National Insurance payments' petition has been posted on the UK Government's Petitions Parliament website. At 10,000 signatures of support, it would be entitled to a written response from the UK Government, most-likely The Treasury.
At 100,000 signatures, it would be considered by the Petitions Committee for debate in Parliament - you can read it in full here.
Understanding National Insurance
The Chartered Institute of Taxation explains National Insurance is a tax on earnings paid by both employees from their wages and by employers (on top of the wages they pay out), as well as by the self-employed (from their trading profits).
Technically National Insurance is a social security contribution rather than a tax, but really, it's a compulsory payment taken from you by the Government, a lot like a tax.
Most people stop paying National Insurance contributions after reaching State Pension age. However, you only pay Income Tax if your taxable income - including your private pension and State Pension - is more than your tax-free allowances (the amount of income you're allowed before you pay tax).
This has been frozen at £12,570 since the 2021/22 financial year, but will rise with inflation on April 6, 2028.
Even if you're still working, when you reach State Pension age you usually stop paying National Insurance contributions.
If you continue to pay them, you can claim back any National Insurance if you have overpaid.
Full details of National Insurance contributions can be found on GOV.UK here.
Calls to unfreeze Personal Allowance
An online petition calling for the personal tax allowance to rise from £12,570 to £20,000 to help people on a low income 'get off benefits and allow pensioners a decent income' was debated last month by MPs in Parliament after more than 271,800 people across the UK have shown their support for the proposal.
An update from the UK Government, related to the potential impact of increasing the Personal Allowance to £20,000, looks set to crush any hopes people may have of seeing the income threshold freeze lifted before the planned rise with inflation in April 2028.
In a written response to Labour MP Tanmanjeet Singh Dhesi, Treasury Minister James Murray said the UK Government 'has no plans to increase the Personal Allowance to £20,000'.
Mr Murray said: 'The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds.
'The Government has no plans to increase the Personal Allowance to £20,000.'
He went on to explain how increasing the Personal Allowance to £20,000 would 'come at a significant fiscal cost of many billions of pounds per annum' adding this would 'reduce tax receipts substantially, decreasing funds available for the UK's hospitals, schools, and other essential public services that we all rely on'.
The Treasury Minister continued: 'It would also undermine the work the Chancellor has done to restore fiscal responsibility and economic stability, which are critical to getting our economy growing and keeping taxes, inflation, and mortgages as low as possible.
'The Government keeps all taxes under review as part of the policy making process. The Chancellor will announce any changes to the tax system at fiscal events in the usual way.'
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