New calls for over-60s to be exempt from paying National Insurance

A new online petition is demanding the UK Government abolish National Insurance contribution deductions for workers aged over 60.

Currently, people automatically cease having NICs removed from their wage slips upon reaching State Pension age, presently set at 66 but scheduled to increase to 67 between 2026 and 2028.

Petition founder Mike Haynes contends that exempting workers above 60 from National Insurance payments would "make it easier financially for older people to survive".

He continued: "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 appeared on the UK Government's Petitions Parliament website, reports the Daily Record.

Should it reach 10,000 signatures of backing, it would warrant a written response from the UK Government, most likely The Treasury.

Upon achieving 100,000 signatures, the Petitions Committee would consider it for parliamentary debate - you can read it in full here.

Understanding National Insurance

The Chartered Institute of Taxation clarifies that National Insurance constitutes a levy on earnings paid by both employees from their salaries and by employers (in addition to the wages they distribute), as well as by the self-employed (from their trading profits).

Technically National Insurance represents a social security contribution rather than a tax, but in reality, it's a mandatory payment extracted from you by the Government, much like a tax. Most people cease paying National Insurance contributions upon reaching State Pension age.

Nevertheless, you're only liable for Income Tax if your taxable income - encompassing your private pension and State Pension - exceeds your tax-free allowances (the sum of income permitted before taxation begins).

This threshold has remained static at £12,570 since the 2021/22 financial year, but is set to increase with inflation on April 6, 2028.

Even if you remain in employment, upon reaching State Pension age you typically cease paying National Insurance contributions. Should you continue making payments, you can reclaim any National Insurance overpayments.

Complete information regarding National Insurance contributions is available on GOV.UK here.

Demands to lift Personal Allowance freeze

An online petition urging the personal tax allowance to climb from £12,570 to £20,000 to assist low-income earners "get off benefits and allow pensioners a decent income" received parliamentary debate last month after garnering support from more than 271,800 people nationwide.

A Government update concerning the potential consequences of raising the Personal Allowance to £20,000 appears poised to dash any expectations of the income threshold freeze being lifted before the scheduled inflation-linked rise in April 2028.

In a written reply to Labour MP Tanmanjeet Singh Dhesi, Treasury Minister James Murray declared the UK Government "has no plans to increase the Personal Allowance to £20,000".

Mr Murray stated: "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 further explained that raising the Personal Allowance to £20,000 would "come at a significant fiscal cost of many billions of pounds per annum" and 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."