A new report by the Resolution Foundation Intergenerational Commission has suggested pensioners be taxed more in order to fund a £10,000 lump sum for every 25 year old. Stuart Price, Partner and Actuary at Quantum Advisory, thinks, while controversial, the report’s recommendations are worth exploring further.
“While I can see the sense of increasing taxes for pensioners to even out the intergenerational divide, I would prefer for any additional taxes to go towards pension provision rather than a £10,000 lump sum.
“The extra revenues could be used to increase the tax relief on pension contributions for the younger generation and less well-off individuals so that they have a bigger incentive to save for their retirement with the goal of providing a better income in retirement.
“The report also suggested those over state pension age should pay National Insurance, which is an interesting idea too. If it came to fruition, I would like some of these proceeds going towards funding the State Pension for the younger generation as well as paying for social care for the elderly. This could, for example, help reduce the likelihood of the State Pension Age increasing even further for the younger generation.”
The report also calls for council tax to be replaced by a property tax to target wealthier homeowners, and for inheritance tax to be scrapped and replaced with a lifetime limit.
For more information about independent financial services consultancy Quantum Advisory, visit www.quantumadvisory.co.uk.
Stuart Price is a Partner at Quantum Advisory, which has offices in London, Amersham, Bristol, Cardiff and Birmingham.
Established in 2000, Quantum Advisory provides pension and employee benefits services to employers, scheme trustees and members.