Should the triple lock on pensions continue?

[najaB]

That implies that most people on basic rate are struggling, which is over 80% of income tax payers. So I think that is a bit of an exaggeration. Most people who are 'struggling' on higher rate don't know how to budget properly.

That does rather depend on your precise definition of 'struggling'. For some people that might be "Can barely afford private school for the kids", for others it might be "Don't know if we're going to have anything to eat tomorrow".

 

[johncrossley]

for others it might be "Don't know if we're going to have anything to eat tomorrow".

Can someone on higher rate really be short of food? They would have to be spending recklessly in some way.

 

[najaB]

Can someone on higher rate really be short of food? They would have to be spending recklessly in some way.

A single parent with three kids and a large mortgage taken out when they were in a relationship perhaps?

 

[SuspectUsual]

A single parent with three kids and a large mortgage taken out when they were in a relationship perhaps?

Exactly that type of scenario. Or a couple with small children and one parent staying at home.

 

[ainsworth74]

Exactly that type of scenario. Or a couple with small children and one parent staying at home.

And of course that parent could go back to work but depending exactly how many children and how small they are the cost in childcare may end up being the same or more than the wages or at the very least will eat away massively at the value of the money brought in by the parent going back to work.

 

[david1212]

... There's certainly an argument to be made that we should just roll it ( National Insurance ) into income tax and be done with it rather than having a separate line item. NI would then just be a credit on your record. Effectively meet criteria x gain one years credit which is close to the current system just without any taxation element.

You are ignoring the fact that NI contributions both employer and employee are based on earnings while personal tax is based on income from all sources including investments & pension.

For those who are not employed but have non-earned income beyond the 20 - 40% tax threshold the 20% increase is significant. For those who are an employee the effective increase is only 10% because NI contributions drop from 13.2% to 3.2%.
I unsure now for the self-employed but I thought unlike years ago their combined NI and tax contributions based on gross trading profit ( i.e. total payments received less cost of sales i.e. items bought to sell / materials used e.g. builder and allowed expenses ) was similar to an employee.

For the employer as I interpret the government website page listing the thresholds they pay 15.05% on all of the employee earnings over £175 per week / £758 per month.