Latest pension rule changes

System

There's an interesting article in the saturday 11th October Telegraph about inheriting pensions.
It doesn't just mean a beneficiary inheriting the capital remaining the the pot, it says;
"It could make more sense to keep the pension money invested and take a regular income from it instead".

Articles in other paper talk about the posibilities of permanent inherited pension pots, growing tax-free, paying out drawdown to children and grandchildren.

Surely they are wrong - this hasn't been suggested by the government?
Only a dependent beneficiary (eg widow or child under 23) can continue drawdown, not an adult offspring.

zagfles

Clifford_Pope wrote: »

There's an interesting article in the saturday 11th October Telegraph about inheriting pensions.
It doesn't just mean a beneficiary inheriting the capital remaining the the pot, it says;
"It could make more sense to keep the pension money invested and take a regular income from it instead".

Articles in other paper talk about the posibilities of permanent inherited pension pots, growing tax-free, paying out drawdown to children and grandchildren.

Surely they are wrong - this hasn't been suggested by the government?
Only a dependent beneficiary (eg widow or child under 23) can continue drawdown, not an adult offspring.

No anyone can continue drawdown, tax free if the pensioner dies under 75, or at marginal tax rates if over 75. See https://www.gov.uk/government/news/chancellor-abolishes-55-tax-on-pension-funds-at-death

System

Interesting. Well, it's what it says so presumanly is correct.

Hitherto only a widow or dependent child could continue drawdown after the policyholder's death. But now any nominated beneficiary can do so.

So they are not just abolishing the 55% charge, but also much more fundamentally, widening the category of potential drawdown beneficiary.
Wow

enator

I'm hoping to retire early shortly, and whilst these changes are very welcome I cannot believe that over my (hoped for) 30 year retirement there will not be a reversal by some future chancellor

zagfles

enator wrote: »

I'm hoping to retire early shortly, and whilst these changes are very welcome I cannot believe that over my (hoped for) 30 year retirement there will not be a reversal by some future chancellor

Whatever you do might be affected by future govt changes, but govts tend to be careful about changes which have significant retrospective adverse impact, especially when it comes to pensioners who are good voters!