Those who choose to work past the age of 65 should continue to pay National Insurance in order to support younger workers, a group of Tory MPs has suggested.
According to the Conservative MPs, such an initiative would raise up to £2 billion a year. The group said younger workers could be given a National Insurance break whilst they get their foot on the ladder.
The suggestion comes after studies have suggested that today’s young workers are likely to end up financially worse off than their parents.
Currently, those over the age of 65 no longer have to pay National Insurance, although employers still pay 13.8 per cent for them for pensions and benefits.
In their report, Policy Bites: Seven Shots in the Arm of Britain, the MPs said, “Over-65s who continue to work should pay National Insurance contributions on their earned income, just like anyone else they work with.”
According to the Institute of Fiscal Studies, up to £7 billion could be raised if National Insurance was applied to all the income of the over-65s and as much as £1 billion if it was applied to earned income only. However, estimates based on Treasury PAYE figures suggest that just under £2 billion could be raised.