Pensioners should pay more tax

Published by Hugh Morris on 25 April 2013.
Last updated on 25 April 2013

Tax burden

Pensioners should pay more tax to "share the pain of deficit reduction", according to a leading think tank.   

Older people are now in the top half of the UK earners and have considerable disposable income so they should pay tax at the same rate as younger people, says a report by the Fabian Society.    

Andrew Harrop, the report's author, says older people today are often on middle incomes – neither wealthy nor poor – and this has "profound implications" on the way society works, given young people are struggling to get on the housing ladder.   

"In public policy and deficit reduction measures, ministers should adopt a presumption of equality across age groups," he writes.   

"In financial terms alone older people are no longer distinct ,and blanket policies favouring them should be reviewed."  

As well as recommending pensioners' taxes be increased, the Fabian Society says benefits such as the winter fuel allowance should be reassessed and the government should scrap its "triple-lock", which keeps pensions rising with the rate of inflation as working-age incomes fall in real terms.   

Limited options

Michelle Mitchell, the Age UK director general, said: "The Fabian Society is right to point out that there has been significant progress in tackling pensioner poverty in recent years. But there are still 1.7 million pensioners living in poverty today, while a further 1.1 million have incomes only just above the poverty line.  

"It can be difficult for older people to change their financial plans as their options are likely to be very limited.

They have also contributed national insurance payments throughout their working lives to receive in return a state pension that ensures a financial safety net but little more."

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