Diabolical pension inheritance tax on death 2027.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81980860#Comment_81980860

For DB pensions and annuities that's certainly the case as they have no value after death. But with DC pensions and commonly recommended drawdown amounts there is a high probability that the DC pension will have a large balance at death to be passed on. In the UK the idea that a pension can be a source of generational wealth is still relatively novel. Most people's pensions are in DC accumulations, but many still hold rather outmoded DB attitudes to those pensions.

horsewithnoname

pensions are to provide for you in retirement. If you want to give your kids money, do it now, live 7 years and you’re good.

mrklaw

look on the bright side that its only 40% rather than the 55% you used to pay on death on DC pensions?

Aylesbury_Duck

If you know you'll have enough to give your kids, give the amount to them now. Why would you hoard it?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81980764#Comment_81980764

https://forums.moneysavingexpert.com/discussion/6666118/diabolical-pension-inheritance-tax-on-death-2027

Giving large amounts to charity, whilst alive or in your will, can reduce any potential IHT bill. In fact if you do this in your will, it can also reduce the 40% rate on other assets.

LHW99

Take out an annuity? Spend or give away any extra income resulting.

Cobbler_tone

I've always planned to gift my children sizable amounts when I retire next year at 58. I know what I need and have the backbone of a decent DB pension. Due to complicated circumstances it makes sense for me to do this and the message will be "anything left when I'm gone will be a bonus."

poseidon1

https://forums.moneysavingexpert.com/discussion/6666118/diabolical-pension-inheritance-tax-on-death-2027

Are you likely to have much of a DC pension fund left in years to come for IHT thereon to be a problem?

Your circumstances suggest you have nil rate bands totalling £500k. Does all your accumulated assets (house, cash, isas, DC pension pot) greatly exceed £500k?

How much is your DC pension pot already declining by way of annual withdrawals?

After doing the sums you may find you are not as badly affected by the pension pot tax changes on the horizon.

MikMikandThriceMik

https://forums.moneysavingexpert.com/discussion/comment/81981291#Comment_81981291

Ah, actually, after you guys have clarified,I kinda now wish I had enough pension and assets to be hit with this 40% tax ;)

Since I am very poor, it will not affect me at all.

Thanks to everyone who enlighrened me, now I must scurry back into the corner of my round room :)

kempiejon

Like many the poster is a way short of understanding pensions and inheritance, there have been some helpful pointers. You know tax, especially inheritance can be mitigated. If the thread creator were to understand a bit more they'd probably work out how to minimise the IHT bill for their estate so there's some future reading. But it's nice to vent, even, sometimes especially, from a position of confusion.