I’ve just passed my CII level 4 diploma in financial planning and got a new job as a trainee advisor. i’m so happy i found your channel! earned a sub 😊
Pensions were not meant as inheritance tax dodge, although DC pensions are now in fact savings schemes since "pension freedoms" came in. The issue is if these rules would apply retrospectively to pension pots already built up: that looks like theft not taxation. So when they say be on the look out for "pension scammers trying to steal your pension", the first place to look could be the government.
You get tax relief when you pay money in yet the Labour government is proposing to tax your beneficiaries twice if they take it out. Seems pretty unfair to me. Let's hope this decision gets the push back it deserves.
@@paultune1696 I hope, though it's unlikely, Reeves reverses some of these plans, but the main thing is Labour get booted out in 4 years never to return. I can see her point about raising taxes to pay for 'crumbling public services' it's the way she's gone about it that is so cynical
Given the liabilities and additional administration being placed on the pension providers I can also see the fund management fees increasing to cover this
soon as I saw the budget I thought it was double-taxation. In theory if you plan your pension to be for your retirement I shoudln't mind. I'm not rich and doing estate planning. But if my caution in retirement means a bit left over, I'd like the option to leave some to my kids or grandkids. freezing thresholds and increased house prices means more 'normal' families will be affected (I know its a small % now but it'll increase with that frozen threshold). And pensions are disproportionately large - they aren't 'savings' as much as a drawdown fund for retirement. So its very easy potentially for them to blow through the IHT thresholds which is a worry.
Thank you, someone who has actually worked it out unlike so many others who think we should gift the shirt of our backs to the government! Absolutely correct and in no time EVERYONE will pay IHT and let's see what the jealous ones have to say then.
The HMRC need to extent their deadlines for IHT payments as it is already causing problems where family are having to get loans to pay the tax then try to get this paid off later when the estate probate allows access to the money to pay back the loan. Madness !!!!
It can take years to get a lease extension and sell a deceased persons property and that sale price can determine how much IHT is payable. Frequently it sells for less than expected and a reclaim has to be made. After 2027 the pension co will probably have to be given an estimate of how much IHT is payable then years later claim some back if the house sells for less than expected. Could easily take more than two years. Im dealing with an estate now that has taken three years and court cases to enable a sale.
At last, a non-whiner but a practical man (or woman) of action. A true action hero. Unfortunately there is far too much whining and moon-howling going on over this.
This Is exactly what we saw when Labour were in power in the 70s. Very high tax and people just avoid it. Thatcher lowered tax and got more coming in because if you our tax too high people just don’t pay it one way or another. All these whiney left wingers butch in about people not paying their fair share but they don’t understand they already pay lots of actual money just not the same % as other people do.
care costs are a big worry,. Home care about 3k a month and residential or nursing home 60 k or so a year and no tax relief. Until your assets ate below 24k no government help. I think tax relief on paying for care costs would be nice . But I do not expect this any time soon. Care costs can eat up most estates.
Over 40+ years I've had 2 private sector, 1 public sector, and 1 self invested pension. Until this budget the SIPP (>£500k) was going to my 3 daughers. Now I need to work out an alternative approach so I am keen to hear options in the next video. So far, the best I can come up with is to a) retire immediately b) make my wife the beneficiary not the kids c) drugs, prostitutes and fancy cars.
You only pay some tax if you have more than £500K to pass on, more than £1million if joint with your wife. Stop making a mountain out of a molehill. There are many options available to dodge the tax, if tax avoidance is such a big thing for you.
I'm in the same boat as you - son, disabled daughter and potential grandchildren were intended beneficiaries of the SIPP before the budget - now I'm looking at alternatives. Option d) could be sell up seven years before you die, buy a cheap property in the north and give the proceeds of the house sale to your kids - no IHT on gifts after seven years, sliding scale if you die before the seven years. The combined value of your pensions, assets and cheap house could now be less that the one million joint IHT threshold with your wife - nothing to pay on IHT on second death. Only trouble is the crystal ball may be cloudy and not give you seven years warning.
@@patoises So please enlighten us and tell us how. It's no good being vague and I would welcome a definitive means to "dodge" tax or should I say double taxation on money I earned and not the state. Over to you buddy I'm all ears/eyes.........
@grahamwarrin3313 agreed - although I'd expect a high % of people from the south (with more valuable properties) would not really want to spend their final years up north (for various reasons e.g. buying/selling a home can be stressful, likely will be further away from family members, older people tend to prefer being in familiar settings). Furthermore, there's nothing to say that the rules won't change once or even multiple times between now and your demise, which would mean that a lot of people's tax planning will be ineffective.
I retired at age 53, so I am in my early 60s. Many of them resisted me because they couldn't understand the idea of not working if it wasn't necessary. I considered the phases of my life. I worked very hard to achieve what I have now, but in my last years, I owe it to myself to "stop and smell the roses." In my instance, I departed the nation after retiring and currently reside in Latin America. It made it possible for me to appreciate my new surroundings while escaping all the bad things that were going on in America. Nobody that I know of regrets retiring has yet to come to me.
Nice way to retire. For me, I believe retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement fund has grown way more than it would have with just the 401(k). Haha.
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than a million dollars by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like Kathie Daisy Bosco who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Thanks for this. I'm curious: Can we take legal action against the Treasury on the grounds of inequity (Private vs Public sector)? I've no problem paying my fair share if everyone else does. But this bias is taking the pi$$ now.
As healthcare professional in the NHS, if they touched the pension I would leave immediately. Not exaggerating but it's the only thing worth staying for and so many colleagues say the same
My understanding (and I'm not a Solicitor so bear in mind this is just my layperson's view) is that there could be scope for challenge. I'm just not sure who would fund that. Famously the McCloud Challenge in the public sector was started by judges and I'm just not sure who would have the resources, time and energy to make that challenge on what is an area understood by a very small fraction of the population.
Making my SIPP subject to inheritance tax means every pound I earn today will only be worth (to my family) 60% of what it was before the announcement as I have funds already exceeding the IHT threshold. So time to stop working immediately and start spending my SIPP. The good news is everything I buy now is effectively only costing 60% of what it cost before the announcement as I will be spending funds which already exceed the IHT threshold.
This hasn't gone through yet and needs to be brought up in Parliament at highest level. However which MP is going to shit in their own nest and argue against IHT in their favour. This is corruption at its most blatant level.
Why don't you take advantage of the very generous seven-year rule? Do you not trust your children to look after you once the dosh is in their hands? If that is so , why leave the little spongers anything anyway?
The pension IHT changes make it even more important that there are changes to the way IHT is paid, the current system is the ultimate catch 22 , you have to pay the IHT in order to get Probate to be able to acess the deceased's estate to to pay the IHT... till now that would usually be due to a property that has some IHT due, add in a pension and the IHT bill that has to be funded up front can explode.....
The principle of this policy is okay, but the bands need shifting. If all assets (including pensions) are to be counted, then the tax brackets probably need to be tired: no tax below 0.5M, reduced rate between 0.5 and 1M, etc. There needs to be automatic adjustment in line with inflation, not a political can to be kicked from one election to another, a future govt would need a massive public mandate to go back on that deal.
they should add some level of tax free allowance for the pension like they do for property. If you have eg a 4% drawdown there is a huge variance in returns so if the market does well, you may end up with a large amount of money even with 'normal' retirement planning. You have to plan based on worst case so you include buffer and draw down cautiously.
I am single with one child , I have spent the past 10 years planning to pass on my pension pot to them and now that has been swept away. Maybe you should do a video on leaving the country to avoid IHT as that is most likely what I will do.
You only pay some tax if you have more than £500K to pass on. If you are lucky enough to be in that position, what's wrong with paying some tax? Tax goes into public services which you and your child benefits from
@patoises absolute bulls@$& 40% is not paying 'some tax' it's robbery. If your trying to hit the rich then the allowance should have been increased before the tax kicks in. I transferred out of my company defined benefits scheme to provide a future for my kid who will likely never be able to buy a house on his own and his contributions based pension will be peanuts over the long term. Accepting gifts for clothing your wife and box at football is ok for 2 tier Kier and by the way the economy is shot to bits due to Brexit and will never recover whilst we try to go it alone so all this tax grab will fall on its arse over the next few years
This was a public sector budget. The discrepancy between DB and DC schemes with IHT and death benefit is very unfair. Think of all the suggestions that came up for getting more tax from pensions. ie reducing tax free cash down to £100K. This would have affected both DB and DC schemes ie public sector would have been affected too. So it wasn't done along with all the other pensions suggestions that might affect the public sector. Think too of the rise in employers NICs. This has no effect on the public sector as its just the govt as employer paying the extra NIC to the govt.
Could one argue that in certain circumstances a DC scheme has a significant advanatge over a DB scheme. A DC scheme funds may be passed on on death even if IHT applies whereas a DB can ostensibly be not apart from some death benefits that may be payable.
The people working in the private sector are realising that all they are for is to pay the wages and pensions of the public sector. There are no efficiencies or increases in productivity to be achieved in the public sector. It is not what they are about. There is no risk of losing income so long as the private sector is kept with its face to the grindstone with the belief that work is worth it.
As healthcare professional in the NHS, if they touched the pension I would leave immediately. Not exaggerating but it's the only thing worth staying for and so many colleagues say the same.
It wouldn’t be the first time where legislation and processes are put in place in the pension sector. Currently there are delays, and deadlines are being missed, with the McCloud judgement due to government departments not thinking through the process and mapping it correctly.
Challenging? Don't you mean life ending? Why do single people keep getting smashed in the face by everything? Something has been wrong in this system for decades now, but people just seem to have lost all dignity and respect for themselves that they just don't care and let all this stuff continue to happen without challenge.. People just accept it... its very very very strange..
It's already challenging, with the IHT tax free allowance of £325k having been frozen for many years, whilst married couples effectively get a £1m tax free allowance. And that's before you start on the disproportionate tax single people pay on income & Council tax.
@@Benzknees Yes! But the list doesn't stop there.. Its like an entire generation have gone to war on singles and younger people.. Easy way to get rid of thousands without anyone noticing I suppose.
Maybe a strategy for the over 75's would be to gift their house to their children and pay the market rate rent so they can keep living in it and avoid the 7 year rule on the gift, take the 25% tax free part of their pensions and gift it (7 year rule applies), then use the surplus income gifting rule with the SIPP pension but being careful not to go into the higher rate band of income tax when extracting it?
Hmm, cant say I am impressed by these fund IHT changes, particularly given by my calculations I will have circa 700k above the 1 million limit as a married person and I will have to pay £280k tax! Perhaps I should have pissed it all against a wall rather than doing the right thing. Meanwhile, the public sector continues to become the only job in town and the private sector pays their salary's and pensions! Something is seriously wrong when those who produce get way less than the non-productive.
Use your brain there are plenty of ways around this, but there is more risk as if you die before you finish implementing your IHT avoidance plans your estate will get caught anyway, so pass everything you don't need to your kids ASAP
@@jabberwockytdi8901 Please tell me how I can "get around" this. As for leaving it all to the kids then fortunately I have 2, but suppose I didn't and wanted to leave my property to someone/anyone, then that's £350K straight to the state and there is nothing I can do about that. So again, please tell me how to get around that.
@@dontunoThey make it so you can’t. You have to leave/give money now and hope you live for 7 years to cancel the IHT on that gift. Make records of gists otherwise taxman will want the tax on them.
As healthcare professional in the NHS, if they touched the pension I would leave immediately. Not exaggerating but it's the only thing worth staying for and so many colleagues say the same
As healthcare professional in the NHS, if they touched the pension I would leave immediately. Not exaggerating but it's the only thing worth staying for and so many colleagues say the same
If one health care professional improves the life of only 2 people, to allow them to return to work, are they not twice as productive as an individual private sector worker? They might be achieving that on a daily basis.
Cause it not like the workers are contributing to those pension schemes and it was one of the things that kept people in crappy paying jobs. We’ve seen private companies try to run things that are run in the public sector and it costs a hell of a lot more. Is that more productive then? No. The problem with the public sector is generally the type of work they have to do. It, but its nature, isn’t easy to achieve good outputs Having worked in both public and private I know both and the real problem in public sector is getting rid of poor staff. Nigh on impossible.
So, for the general working person. I can see that we will get to the point of not bothering with any sort of savings or pensions and just blowing the lot on cars, holidays, and whatever takes your fancy etc. Its not like we are seeing any sort of genuine improvement in the UK. So, the question is what are we working and saving for. When at every turn the gov want to take your hard earned money. Have savings do you?......tax man wants some of that, own your own house do you? tax man wants some of that...and it goes on. If you think you are getting a crap deal now, just wait till we go cashless. Will they go after the royal family who avoided paying inheritance tax after the unfortunate demise of the queen? Working most definitely needs to be rewarding, or there's just no point.
Why don't you stop working now then and spite the government? No-one is forcing you to work. If you choose to, please stop whining. It is your choice and no-one else's.
@@MarkPayne-k7lI think the whining would be caused by changing rules today that effect past choices based on past rules. There’s a point of principle there it’s retrospective which is unusual and not incremental again unusual
@@wallace-bv4rl Then people should take advantage of the very generous seven-year rule. The reason so many do not is that they do not trust their offspring to look after them once the dosh is in their sticky little hands. So why leave the little parasites anything anyway.? because parasites is what they by definition will be. The seven-year rule is the get out of jail free card for everyone. The rest of us are sickened by the unseemly whining going on. As for retrospective things, that is how governments have operated since time immemorial. We have all suffered from such sleights of hand but in this particular situation there is an obvious solution that is not normally the position in other cases. If one does not wish to follow my (free) advice, then it is their choice and no-one else's to continue building up the nest egg that would otherwise have represented totally unearned income for the beneficiaries. In the national context, which is the real issue, the more money that avoids IHT, the higher the taxes on earned income for all of us. How can that possibly be fair?
As healthcare professional in the NHS, if they touched the pension I would leave immediately. Not exaggerating but it's the only thing worth staying for and so many colleagues say the same
@domobomomiles you'd start with new staff. Criminal that new people added into these unaffordable pensions. We might decide that that's all we needed to do.
@@jaaguitar With what incentive.. I am 27 years old and just finished 8 years of training. I could earn 30% more in the private sector but stay for the pension. If you change the pension to the same as offered in the private sector you'd have to increase wages by 30% to the same end. Yes the NHS needs reform but if you think cutting underpaid staffs effective wages is the answer then I wonder if you've considered this?
What you mean like the local government pensions? The ones where the scheme is in surplus. That paid for by the people contributing to it? There are a few councils where they have screwed it uo but the majority are well run. Labour want to move this centrally so that they can screw it up and retrospectively screw the people that have contributed for years. Government has already stolen 24,000 from my pension at today’s money by retrospectively moving my retirement date back. I signed up on a retirement age of 65 which they changed to 67. Paws off.
Passing money down through the generations is your right of choice. That the government want to skim off the cream because they can seems wrong to me. On pensions that have been tax free is understandable, but taxed savings to be taxed again is pure theft. Especially on assets that accrued value through inflation and scarcity value increase. One issue that you haven't mentioned is assets outside the financial realm of contractual pensions and that is physical precious metals. They are safely stored out of sight. Do they have to be declared? Can they be passed to relatives without government intervention? I'm curious to hear your thoughts on this?
As you are talking about IHT, that is totally unearned income for the recipients. Why should they get a windfall free of tax. That would mean that we all have to pay even more tax on earned income than we should but do.Why can the little parasites not stop moaning? Or, you could spend it all before you die. Or, you could take advantage of the very generous seven-year rule.....of course as by clear implication you do not trust the little darlings not to after you once the transfer has been made, then why would you want to leave the little spongers anything anyway? I believe that to be impeccable logic, even if it has not been spelled out to you before. Search your feelings over this. Your true feelings about your descendants rather than just howling at the moon and boring us all to near death ourselves.
That is the problem with capital gains tax, it has become a capital loss tax due to inflation not being fully allowed for. There's nothing wrong with tax gains, but taxes losses is theft. It is similar to the distinction between tax avoidance and tax evasion. If the government starts to behave like scammers, there is no longer a moral case against aggressive tax avoidance schemes, well not from the government anyway.
Any chance the '2027 consultation period ' will include the public ? To cut down on admin how about excluding small pension pots ? Most people impacted will work less /retire early ( so counter productive/growth) and draw down pension earlier imho
Clearly the amount you pay inheritance tax on should only be taxed for subsequent gains to those inheriting! Yes, not how the rules today would appear to apply. This is how it is for other assets outside a pension! Right!
What would be the effective tax rate of someone who inherits a large pension and an estate already subject to IHT and who is currently paying 40% income tax?
Great video,thanks.You didn't comment how this change might push estates above £2m which from my understanding means you loose the residential allowance ? Appreciate if you might clarify this please.
Hi, yes very astute point! I had this in the initial video and then cut it. Partly due to time on the video but also as the HMRC examples don't make reference to the MRNRB so it's not confirmed. The approach I am taking as an adviser is to assume it does taper the MRNRB unless legislation is confirmed to the contrary.
Can you clarify the additional nil rate band of 175k for main home? Everyone quotes the 175k figure, but I believe the figure is the actual property value or 175k whichever is lower.
Thanks for this and for bringing it to peoples attention. I think the media have gone very quiet on the pension changes and seem to be concentrating on the changes to IHT for farmers when in fact the IHT changes to pensions are far worse and are likely to affect more people. Realise you wanted to keep the calculations simple but its actually worse than in your example as the proposals say that the nil rate tax free allowance will now be aportioned between the pension and the rest of the estate so part of the tax free allowance will be applicable to the pension and the tax free allowance on the rest of the estate will be reduced. This has the effect of even higher taxation on the overall estate due to double taxation on the pension. I think for anyone this affects it probably makes sense to draw down the pension first with the aim of having nothing left in it on death whilst trying to save as much tax on the withdrawals as you can. It definitely makes financial planning even more complicated than it already was.
Good video. Is there any way we can complain about these proposals? I just feel we should do something about it, especially that annuities will be included, but not DB income.
Great video, very well explained. I Really like the fact your not just regurgitating the budget changes only, but also looking at practical tips and tactics for someone with a pension and ISA. Looking forward to your next set of videos. Would be really helpful, if you could touch on how to now drawdown your pension and ISA. l tax efficiently. Do you take from pension 1st or the ISA etc. Keep up the good work Mangal
Thank you! Really appreciate the comment as that's why I try to do. I've taken the view that the most valuable thing I can add is insights into strategies and tactics I'll be using and considering for my clients.
If I take an example of a couple with a £1m house and £1.35m pension pot in a SIPP that die in April 2027, the change means £540,000 additional tax on the SIPP plus the loss of the couples combined residence nil rate band allowance of £350,000, so total of £890,000 in additional tax on the estate? Have I understood that correctly?
67%, I’m sure we can do better. What if your non pension assets are worth £2million and you have a £350k pension . The loss of the RNRB increases the marginal rate of tax significantly.
Love this comment! This was a part that got cut from the video (if it gets towards 20 mins + then I can risk viewing figures dropping off quite a bit as it's a lot for some on this area.) I did have in the video a comment that I thought now pensions are within the estate the RNRB should be dropped. It's already a very complex bit of legislation and they either leave it and people get hammered at the higher end of the wealth scale, or apply a carve out and make the estate administration extremely complex.
thanks -- how about if your pension takes you over the £2miilion limit - you then lose your nil-rate band allowance on this amount, adding a further 20% cost in tax on top of the 68%!!!!!!!!!!!!!
Not if you take advantage of the very generous seven-year rule. Do you not trust your children to look after you once their sticky little fingers are on the unearned loot that they would receive? If not, why would you want to leave anything to parasites anyway?
@@paul19vf21 Incapable of rational debate, Paul? You do not believe in a fair society as demonstrated by equal treatment for all, then? It is you perhaps that needs to keep his chin up if you are so bitter about the world. All I seek is fairness for everybody without preferential advantages for pressure group members. Like farmers. It is a pity that you cannot debate without being personally nasty with irrelevant comments made in total ignorance of the circumstances of other human beings who dare have a different point of view to you and who are sickened by the whining pleas for favouritism by certain groups.Favouritism that always comes at the expense of others.
the tax on your pension pot has made me start to think of retiring much earlier than i was , I rather liked the idea of being able to leave a substantial lump sum to my children outside of my estate but that has now gone , my thought process will now change but what I can say for certain is that neither myself or my parents inherited a pension so why should my children
So how complicated does it become with a non-resident overseas spouse? Seems all to complicated, especially if extended admin time after death. Things just keep getting worse, and worse.
A primary motivating factor for people to work hard is to make the lives of their children easier. What seems particularly unfair about inheritance tax with the current thresholds is that if you live in the south because of the cost of housing you will not only pay a lot more for your house over your lifetime but it is likely that the value of family homes will push you above the IHT threshold when you die and your children will end up paying 40 per cent tax on the assets above the threshold. The original intention of IHT was to tax the wealthy not to tax people who worked hard to live in their own home.
If youre an average house however in the south you have seen massive unearned increases in the value of your house in the last 20-30 years - actually also to the detriment of your children who are suffering the dearth of house building. You might have worked hard to live in your house, but not in relation to its value.
@@paulb6152 The value in my house is of little comfort when it is all going to be eaten up helping my children to get somewhere to live in this part of the country when they are middle-aged. Did you experience base rates of 13, 14 and 15 per cent in the 1980s as we did when we were all paying large mortgages in the south?
Sure did remember those rates well! But saying that it’s is all going to get eaten up by IHT is just wrong, if you are married there is a generous allowance anyway (one of my beefs is how this discriminates against singles who just don’t want to get married but that’s another story). Plenty of scope to give it away or set up trusts. I still come back to the main point… SIPPS and pensions were never supposed to be vehicles to avoid IHT and it’s now the situation as before 2015. Considering what Reeves could have done I’m finding the teeth gnashing on this issue way over the top
@@paulb6152 I didn't say that it's all going to get eaten up in IHT - read my comments again. It's likely that the value of my house will use up all of my allowances and any other assets will be taxed at 40 per cent. The high value in my house will all go when it is used to pay for high priced properties for, as I said in my second comment, my middle-aged children.
It’s much worse than 67% for some people as suddenly inclusion of pensions may remove the IT allowance do you lose another 40%. And if you put taxed income into your pension the even more Up to 90% void go in quadruple tax take
I have 100k in my pension pot i am 66 and i have already taken my 25% tax free I am going to sit on my fund for now and when they move up tax tresholds i will start and withdraw every penny and enjoy it I own a company and i am not putting a penny more in pensions or ISA I am looking a loan trusts to invest now which i think will work well for my savings
Hello My sister died aged 56 in July Her estate is estimated to be about 1.3 million She had a defined contribution pension with my 91 year old mother named as the sole beneficiary. Do you know how long it takes to pay out to beneficiaries usually and why the pension company said it has to be dealt with by probate lawyers Nobody has heard anything
@@jstoner9029 the fact it attacks the private sector and protects the public sector (where MPs work). Goes back on their pre election promises, will cause even more hospitality destruction, will cause inflation to go up again and businesses to struggle. It is anti growth. And the OBR have said the 22bn black whole does not exist. Moving DC pensions into IHT when they are so vastly inferior to DB pensions is also an attack on anyone in the private sector trying to plan for a secure future for their children,
@@tancreddehauteville764 can you tell me why? They raise money for school, health care, roads etc. Maybe those are something not needed in Russian bot farms?
Reeves has actually done a better job than the conservatives did… she’s increasing investment into the public sector, education and nhs while increasing taxes in the rich slightly by Increasing cgt (albeit not enough- should be higher) Taxing businesses and farms worth over a million in iht (albeit they still get 50 % relief) Getting rid of non dom status And taxing pension pots - but this she should have put an exemption threshold on like there is for farms of say 1 million or so - this is where she’s done something stupid by taxing all pots when they should leave the smaller pots alone
The nhs pension is halved when it passes to a spouse (Essentially 50% tax) and if you are single disappears on death. No option to leave to children or any other beneficiary.
Thanks for watching. The spousal/dependent's pensions differ between 1995, 2008 and 2015 Scheme for the NHS Pension. There are also options for children's pensions that cease in broadly similar ways as described in the video. ... I still struggle to see the justification for why this should be different from a dependent's annuity, but perhaps it will be ironed out in the consultation.
The benefits you are describing are only if you die in service not if you die in retirement. As soon as you retire the rules are as I have stated. Can’t comment on other defined benefit pensions but definitely for nhs.
By the way I very much enjoy listening to your content! I personally think inheritance tax is the worst of taxes and that childless people are discriminated against as they don’t have the additional home allowance. I do have children so not personally biased in that opinion.
Can somebody explain the IHT rules regarding inheritance to grown up children. It is £325,000 for the home then £175,000 x 2 right. But I assume the x 2 is if I am married? But can I leave £675,000 IHT free to to children if I am divorced, married but separated (wife not included in the will). Then is is £675,000 to my kids.
Ok if I understand that correctly, when the first person dies it is £500,000 and when the second person dies they get £500,000 from before plus their own £500,000. And after 2027 the unused pension is included. Beford it was excluded.
@ no. The, the nil rate band is 325, the property allowance is another 175, becoming 1 million total for a couple. From 2027 the pension becomes part of the estate I.e. before it passed on tax free, now it will be taxed at 40% if no allowances can be applied to it (i.e. say the family home and an ISA came to 1 million quid), If an income is then drawn on it, the income will be taxed at the recipients nominal rate, so if they pay 40% tax, that’s another 40% on the remaining 60% giving an overall tax rate on the pension of over 60%. If you don’t have a home I.e. you’ve used the 7 year rule in time and already signed the house over, you have 2*the 325 remaining to cover the rest of the estate.
33k from a 100k pension is absolutely diabolical. I missed it but what happens when the estate is less than a million, does the individual still pay 45% on the inherited pension per se as income?
Not sure I fully understand this but I think that if you are over 75 when you die with a DC pension your spouse or other beneficiary (eg child) gets taxed at their marginal rate when the money is accessed either as a lump sum or drawdown. This applies under the old and new proposed rules. With the new rules your beneficiaries may additionally pay inheritance tax on the pension pot when you die if the total value of your estate is above the inheritance tax threshold, hence some are calling this double taxation.
@@jimbojimbo6873I believe that's correct - no change if your estate (now including your pension) is worth less than the thresholds eg a million if spouse pre-deceases you and leaves their estate and their half of the family home to you.
So, with a sizeable pension … and being 74, it seems better to cash it in and pay the 45 %, rather than leave it grow and hand over a 67% tax liability….
IHT is the root problem , most people owning a house ( eg 3 bed semi on London) will have 'estates' increasingly caught be fixed IHT allowances ( some will have not raised for 20 years by 2030) . IHT was not intended to catch so many and like the family farmers it will mean more children who cannot get on the property ladder themselves will be forced out of family home to pay IHT. Inherited pension pots if die early would have helped pay the IHT bill , but that safety net has gone now as well.
Presently, so it would seem, the only cash you can release from a SIPP is the tax-free element, at least for now...... Probably best to draw down at the highest rate possible and gift as much as you can without leaving yourself short.
how much does the tax payer contribute to private pension contributions, 20% or 25%? Why shouldn't the tax payer get some back? £600K pension pot, cloud cuckoo land, many just may say! What percentage pay IHT now, 4-6%? Google -average persons private pension fund value uk and one gets this- "According to the ONS, the median average UK pension pot is £32,700, yet this varies significantly depending on age and pension type. For 25-34 year olds, it's £9,300, but for 55-64 year olds it rises to £107,300."
The problem is continuing with current spending in the public sector with a diminishing revenue from the private sector as growth reduces, wealthy and middle income people leave the U.K., companies close or are bought by a foreign company ( that pay taxes in their country). Taxes will need to increase to pay for health care, pensions, unemployment , health & housing benefits. But the private sector is approx 55% against 45% public sector. It’s unsustainable without growth in the private sector
if this is designed to stop people amassing a large amount of wealth in a pension pot and passing it on to future generations to avoid IHT then surely they should have an amount that's exempt. so maybe there should be an allowance off 500k
Bringing personal pension pots into the scope of IHT will mean 40% of the value of the pot will be claimed by the State. The remainder is then taxable on the beneficiary, probably also at 40%. Thus a £1M pot will be whittled down to £360,000, an effective tax rate of 64%. Is it not immoral for the State to take more than 50% of the value of a person's savings? Labour has previous form in confiscatory tax rates, with 98% being its high water mark in the 1960s. Germany, pre-unification, gave us the perfect comparison between enterprise and a socialist command economy, with its car industry. In the West, choose from VW, Audi, BMW, or Mercedes Benz. In the East, join the waiting list for a Trabant. Michael Bishop About to retire
Before pensions came more flexible you would have a company scheme or buy an annuity, both may give a spouses pension but nothing after that. Flexible pensions were meant to help by giving you more flexibility when you wanted to retire and not having to buy annuities, as now poor rates, not to give to your children a tax benefit when you died. Why should the government give you tax relief on contributions to help your children inherit more money, the tax efficiency is there for your retirement
Well said - some of the reaction is downright hysterical to these changes - SIPPS are meant to be for your retirement and not a handy tax dodge to avoid IHT - for goodness sake transfers to spouses are still exempt.
Due to extremely poor annuity rates and the volatility of DC funds to markets conditions people were just not investing in their retirement. This was heading the UK towards a serious state pension crisis that both parties recognised. (David Blunkett is still very vocal about this issue). I think there is a strong argument that the changes were too generous, but that was to drive change. Tax was always payable if the person died after the age of 75, which according to government figures was the majority of people. I also question that you would plan a tax dodge by purposely hoping to die early. From what I have seen the issue people have is not having to pay tax but the fact this could attract a 67+% rate that will once again discourge people investing in their future. In that situation everyone loses.
IHT is making it much less attractive to work longer into retirement age, this is completely opposite to what the government wants or the country needs!
The 75 rule goes back to the old annuity cut off (before 75 the annuity provider had to refund a portion of the cost after 75 they kept it all) I suspect this is still buried in legislation and can’t be unwound
Apparently pension providers cannot undertake trades once a death has been reported, until probate is granted. Hence they may not be able to readily liquidate investments and pay any determined IHT until probate is granted. Six months - a joke.
And at what point do they value the pension for IHT purposes if it's invested? A 0.5-1% change a day isn't unusual but could make huge difference to the value and the amount paid. £100k pension that's all liable for IHT is a £40k bill, but the value drops 40% before you get to pay it (not unheard of) and suddenly you're left with £20k and you then get to pay income tax on that. Time to start burying gold bars and hope the kids remember to dig them up before selling the house...
the bigger problem is you have to pay an estimate of the IHT upfront, but you can't realise the assets untill probate is granted, so you need some kind of bridging loan to cover the 14+ weeks probate takes plus the time to realize the assets - sell a property, liquidate part of a pension fund etc.
@@hooksforestchin As I understand it, and please don't quote me, you can buy up to £10K gold without an audit trail. Certainly you can buy gold and there is no CGT to pay on it.
IHT isn't (at least for the most part) double taxation, or at least no more so than capital gains tax is. The vast majority of it comes from capital gains, from property and shares etc, which would have attracted CGT if crystallised during the owner's lifetime, and from pensions that were saved tax-free and would have attracted income tax had the holder drawn them down. The IHT exemption for pensions always struck me as excessively generous, and has led to the perverse situation of the very wealthy using pensions solely as a doubly tax-free gift to their offspring. On top of that, if paying tax after I'm dead somewhat reduces the amount I'm paying while I'm alive, then I'm all for it.
And a huge chunk of capital gains is a tax on government created inflation, not growth because they got rid of indexation years ago. You take the risk, you can make a real terms loss and still get taxed to the hilt on it.
The public sector pensions are largley unfunded and paid out of tax about 60 billion a year if discount the employer contributions which are largly a paper exercise to off set the cost of penions in payment if all public sector jobs stopped the 60 billion odd a year would still be paid the 60 billion that is reduced on paper with employee contrbutions that are double counted as a contribution then used to off set pensions on paper rather than invested etc. Its not very robust as no displine of the market i am on lower pension expectation based on the same contriution as others because through discrimination that would not get in first tier system like germany US switerland meaning the dont count my orginal start date people that joined later and have paid less get more.the public sector pensions enable this type of corrupt as other than councils neither funded nor costed. The public sector transfer club wherre people put on final salery years after schemes closed on non funded pincal of this questionable approch
@@C2112-s7y 😅 bless her, she’s got a hard job, can’t get blood out of a stone and I’m sure some of the impacts are those pesky old ‘unintended consequences’
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This could affect (up to) 38,000 estates each year. In the week ending 18 October 2024 (Week 42), 10,785 deaths were registered in England and Wales. That equates to 560,820 each year. So you are talking about the top 6.8% of the wealthiest people but only if they did nothing and died intestate. Stop making up scare stories. The UK economy needs a boost and paying for childrens education, healthcare and other essential public services. This whinge truely affects very few mega rich people who should pay more tax
This rant about pension inheritance is not appropriate. Pension funds were never designed to be inherited by the children of the beneficiary - this was never the intended purpose. The purpose of a pension is to provide an income for the beneficiary and, possibly, the marital partner of the beneficiary. Not anyone else. Defined benefit pensions cannot be inherited, they either stop with the death of the beneficiary or they are paid out at a 50% rate to the partner of the beneficiary until they also die.
I respect your views and appreciate you watching my content, but the interpretation of the video here is off. I didn't 'rant' about inheritance. I actually make clear in the video that pensions were designed with the understanding that tax would be paid at a later point, making clear the holes in current legislation around age 75. The conclusion you've reached appears to be a strawman of the video, not what was actually said. Any criticisms were around the inconsistencies with DB dependent's income and annuities, the areas of legislation that need to be ironed out to avoid huge admin issues and an acknowledgement that those who are unmarried will be heavily affected.
This will destroy pension saving in the UK which is what they desire as they see the tax relief as 'giving you' money, when in reality they are letting you defer your tax in the hope that you will not rely solely on the state in retirement, but with the adverse tax treatment and complexity after death and the risk of future rule changes, this means pensions are going to be seen as too risky.
Don't you love it when the government frame the 'tax relief' as government money, 'giving you' money as you say. Not a single penny of that money was given to you by the government - you had to earn it. If you hadn't earned it it wouldn't exist.
It wouldn’t be the first time where legislation and processes are put in place in the pension sector. Currently there are delays, and deadlines are being missed, with the McCloud judgement due to government departments not thinking through the process and mapping it correctly.
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Thanks, welcome to the profession!
Pensions were not meant as inheritance tax dodge, although DC pensions are now in fact savings schemes since "pension freedoms" came in. The issue is if these rules would apply retrospectively to pension pots already built up: that looks like theft not taxation. So when they say be on the look out for "pension scammers trying to steal your pension", the first place to look could be the government.
Well said.👏👏
Well said. Pension monies get taxed when the money is accessed so why the additional IHT?
You get tax relief when you pay money in yet the Labour government is proposing to tax your beneficiaries twice if they take it out. Seems pretty unfair to me. Let's hope this decision gets the push back it deserves.
@@paultune1696 I hope, though it's unlikely, Reeves reverses some of these plans, but the main thing is Labour get booted out in 4 years never to return. I can see her point about raising taxes to pay for 'crumbling public services' it's the way she's gone about it that is so cynical
Given the liabilities and additional administration being placed on the pension providers I can also see the fund management fees increasing to cover this
soon as I saw the budget I thought it was double-taxation. In theory if you plan your pension to be for your retirement I shoudln't mind. I'm not rich and doing estate planning. But if my caution in retirement means a bit left over, I'd like the option to leave some to my kids or grandkids. freezing thresholds and increased house prices means more 'normal' families will be affected (I know its a small % now but it'll increase with that frozen threshold). And pensions are disproportionately large - they aren't 'savings' as much as a drawdown fund for retirement. So its very easy potentially for them to blow through the IHT thresholds which is a worry.
Thank you, someone who has actually worked it out unlike so many others who think we should gift the shirt of our backs to the government! Absolutely correct and in no time EVERYONE will pay IHT and let's see what the jealous ones have to say then.
The HMRC need to extent their deadlines for IHT payments as it is already causing problems where family are having to get loans to pay the tax then try to get this paid off later when the estate probate allows access to the money to pay back the loan. Madness !!!!
It can take years to get a lease extension and sell a deceased persons property and that sale price can determine how much IHT is payable. Frequently it sells for less than expected and a reclaim has to be made. After 2027 the pension co will probably have to be given an estimate of how much IHT is payable then years later claim some back if the house sells for less than expected. Could easily take more than two years. Im dealing with an estate now that has taken three years and court cases to enable a sale.
Time to retire early, pull it out spread over a lot of years and give to your kids to invest! Bye bye inheritance tax!
Sadly bye bye private medical treatments, too.
At last, a non-whiner but a practical man (or woman) of action. A true action hero. Unfortunately there is far too much whining and moon-howling going on over this.
This Is exactly what we saw when Labour were in power in the 70s. Very high tax and people just avoid it. Thatcher lowered tax and got more coming in because if you our tax too high people just don’t pay it one way or another.
All these whiney left wingers butch in about people not paying their fair share but they don’t understand they already pay lots of actual money just not the same % as other people do.
Sod the kids 😂
Giving from spare income has always been the most efficient way to avoid IHT
care costs are a big worry,. Home care about 3k a month and residential or nursing home 60 k or so a year and no tax relief. Until your assets ate below 24k no government help. I think tax relief on paying for care costs would be nice . But I do not expect this any time soon. Care costs can eat up most estates.
Agreed, it's a real planning challenge at the moment.
'Potential' huge sums towards the end of life... but for some - none at all.
Over 40+ years I've had 2 private sector, 1 public sector, and 1 self invested pension. Until this budget the SIPP (>£500k) was going to my 3 daughers. Now I need to work out an alternative approach so I am keen to hear options in the next video. So far, the best I can come up with is to a) retire immediately b) make my wife the beneficiary not the kids c) drugs, prostitutes and fancy cars.
You only pay some tax if you have more than £500K to pass on, more than £1million if joint with your wife. Stop making a mountain out of a molehill. There are many options available to dodge the tax, if tax avoidance is such a big thing for you.
I'm in the same boat as you - son, disabled daughter and potential grandchildren were intended beneficiaries of the SIPP before the budget - now I'm looking at alternatives. Option d) could be sell up seven years before you die, buy a cheap property in the north and give the proceeds of the house sale to your kids - no IHT on gifts after seven years, sliding scale if you die before the seven years. The combined value of your pensions, assets and cheap house could now be less that the one million joint IHT threshold with your wife - nothing to pay on IHT on second death. Only trouble is the crystal ball may be cloudy and not give you seven years warning.
@@patoises So please enlighten us and tell us how. It's no good being vague and I would welcome a definitive means to "dodge" tax or should I say double taxation on money I earned and not the state. Over to you buddy I'm all ears/eyes.........
@grahamwarrin3313 agreed - although I'd expect a high % of people from the south (with more valuable properties) would not really want to spend their final years up north (for various reasons e.g. buying/selling a home can be stressful, likely will be further away from family members, older people tend to prefer being in familiar settings).
Furthermore, there's nothing to say that the rules won't change once or even multiple times between now and your demise, which would mean that a lot of people's tax planning will be ineffective.
I opted for retirement at 53. Since the plan is to "own nothing and be happy", might as well use savings on myself and those I care about.
I retired at age 53, so I am in my early 60s. Many of them resisted me because they couldn't understand the idea of not working if it wasn't necessary. I considered the phases of my life. I worked very hard to achieve what I have now, but in my last years, I owe it to myself to "stop and smell the roses." In my instance, I departed the nation after retiring and currently reside in Latin America. It made it possible for me to appreciate my new surroundings while escaping all the bad things that were going on in America. Nobody that I know of regrets retiring has yet to come to me.
Nice way to retire. For me, I believe retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement fund has grown way more than it would have with just the 401(k). Haha.
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than a million dollars by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like Kathie Daisy Bosco who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
well done, you escaped the dept and tax trap
I'll move to New Zealand where there is no inheritance tax.
Thanks for this. I'm curious: Can we take legal action against the Treasury on the grounds of inequity (Private vs Public sector)? I've no problem paying my fair share if everyone else does. But this bias is taking the pi$$ now.
As healthcare professional in the NHS, if they touched the pension I would leave immediately. Not exaggerating but it's the only thing worth staying for and so many colleagues say the same
My understanding (and I'm not a Solicitor so bear in mind this is just my layperson's view) is that there could be scope for challenge. I'm just not sure who would fund that. Famously the McCloud Challenge in the public sector was started by judges and I'm just not sure who would have the resources, time and energy to make that challenge on what is an area understood by a very small fraction of the population.
Making my SIPP subject to inheritance tax means every pound I earn today will only be worth (to my family) 60% of what it was before the announcement as I have funds already exceeding the IHT threshold. So time to stop working immediately and start spending my SIPP. The good news is everything I buy now is effectively only costing 60% of what it cost before the announcement as I will be spending funds which already exceed the IHT threshold.
Me too. I retired six years ago and have not touched my pension yet. Now I need a complete reversal of my previous strategy because of this change.
This hasn't gone through yet and needs to be brought up in Parliament at highest level.
However which MP is going to shit in their own nest and argue against IHT in their favour.
This is corruption at its most blatant level.
Why don't you take advantage of the very generous seven-year rule? Do you not trust your children to look after you once the dosh is in their hands? If that is so , why leave the little spongers anything anyway?
@@MarkPayne-k7l lol
@@MarkPayne-k7l Gifting will be part of the strategy as we get older. Have to keep enough for our own security first.
The pension IHT changes make it even more important that there are changes to the way IHT is paid, the current system is the ultimate catch 22 , you have to pay the IHT in order to get Probate to be able to acess the deceased's estate to to pay the IHT... till now that would usually be due to a property that has some IHT due, add in a pension and the IHT bill that has to be funded up front can explode.....
The principle of this policy is okay, but the bands need shifting. If all assets (including pensions) are to be counted, then the tax brackets probably need to be tired: no tax below 0.5M, reduced rate between 0.5 and 1M, etc. There needs to be automatic adjustment in line with inflation, not a political can to be kicked from one election to another, a future govt would need a massive public mandate to go back on that deal.
they should add some level of tax free allowance for the pension like they do for property. If you have eg a 4% drawdown there is a huge variance in returns so if the market does well, you may end up with a large amount of money even with 'normal' retirement planning. You have to plan based on worst case so you include buffer and draw down cautiously.
I am single with one child , I have spent the past 10 years planning to pass on my pension pot to them and now that has been swept away. Maybe you should do a video on leaving the country to avoid IHT as that is most likely what I will do.
You only pay some tax if you have more than £500K to pass on. If you are lucky enough to be in that position, what's wrong with paying some tax? Tax goes into public services which you and your child benefits from
@patoises absolute bulls@$& 40% is not paying 'some tax' it's robbery. If your trying to hit the rich then the allowance should have been increased before the tax kicks in. I transferred out of my company defined benefits scheme to provide a future for my kid who will likely never be able to buy a house on his own and his contributions based pension will be peanuts over the long term. Accepting gifts for clothing your wife and box at football is ok for 2 tier Kier and by the way the economy is shot to bits due to Brexit and will never recover whilst we try to go it alone so all this tax grab will fall on its arse over the next few years
@@patoises😂😂😂
This was a public sector budget. The discrepancy between DB and DC schemes with IHT and death benefit is very unfair. Think of all the suggestions that came up for getting more tax from pensions. ie reducing tax free cash down to £100K. This would have affected both DB and DC schemes ie public sector would have been affected too. So it wasn't done along with all the other pensions suggestions that might affect the public sector. Think too of the rise in employers NICs. This has no effect on the public sector as its just the govt as employer paying the extra NIC to the govt.
Starmer's okay as he has his own pension law to protect his government pension. I really despise these champagne socialist...
Could one argue that in certain circumstances a DC scheme has a significant advanatge over a DB scheme. A DC scheme funds may be passed on on death even if IHT applies whereas a DB can ostensibly be not apart from some death benefits that may be payable.
@@chapman9230 You mean like a DB spouses pension when you die ?
The people working in the private sector are realising that all they are for is to pay the wages and pensions of the public sector. There are no efficiencies or increases in productivity to be achieved in the public sector. It is not what they are about. There is no risk of losing income so long as the private sector is kept with its face to the grindstone with the belief that work is worth it.
As healthcare professional in the NHS, if they touched the pension I would leave immediately. Not exaggerating but it's the only thing worth staying for and so many colleagues say the same.
It wouldn’t be the first time where legislation and processes are put in place in the pension sector. Currently there are delays, and deadlines are being missed, with the McCloud judgement due to government departments not thinking through the process and mapping it correctly.
Single individuals with no direct dependants may find this challenging especially if they support siblings and their children ...
Challenging? Don't you mean life ending? Why do single people keep getting smashed in the face by everything? Something has been wrong in this system for decades now, but people just seem to have lost all dignity and respect for themselves that they just don't care and let all this stuff continue to happen without challenge.. People just accept it... its very very very strange..
It's already challenging, with the IHT tax free allowance of £325k having been frozen for many years, whilst married couples effectively get a £1m tax free allowance. And that's before you start on the disproportionate tax single people pay on income & Council tax.
@@Benzknees Yes! But the list doesn't stop there.. Its like an entire generation have gone to war on singles and younger people.. Easy way to get rid of thousands without anyone noticing I suppose.
Maybe a strategy for the over 75's would be to gift their house to their children and pay the market rate rent so they can keep living in it and avoid the 7 year rule on the gift, take the 25% tax free part of their pensions and gift it (7 year rule applies), then use the surplus income gifting rule with the SIPP pension but being careful not to go into the higher rate band of income tax when extracting it?
Hmm, cant say I am impressed by these fund IHT changes, particularly given by my calculations I will have circa 700k above the 1 million limit as a married person and I will have to pay £280k tax! Perhaps I should have pissed it all against a wall rather than doing the right thing. Meanwhile, the public sector continues to become the only job in town and the private sector pays their salary's and pensions! Something is seriously wrong when those who produce get way less than the non-productive.
Use your brain there are plenty of ways around this, but there is more risk as if you die before you finish implementing your IHT avoidance plans your estate will get caught anyway, so pass everything you don't need to your kids ASAP
@@jabberwockytdi8901 Please tell me how I can "get around" this. As for leaving it all to the kids then fortunately I have 2, but suppose I didn't and wanted to leave my property to someone/anyone, then that's £350K straight to the state and there is nothing I can do about that. So again, please tell me how to get around that.
@@dontunoThey make it so you can’t. You have to leave/give money now and hope you live for 7 years to cancel the IHT on that gift. Make records of gists otherwise taxman will want the tax on them.
As healthcare professional in the NHS, if they touched the pension I would leave immediately. Not exaggerating but it's the only thing worth staying for and so many colleagues say the same
@ I wouldn’t blame you. You guys do all the work and take none of the credit. I think there are more non-medical workers in the nhs now.
Public sector looking after public sector at the expense of productive members of society, who’d have guessed !!!
As healthcare professional in the NHS, if they touched the pension I would leave immediately. Not exaggerating but it's the only thing worth staying for and so many colleagues say the same
If one health care professional improves the life of only 2 people, to allow them to return to work, are they not twice as productive as an individual private sector worker?
They might be achieving that on a daily basis.
Cause it not like the workers are contributing to those pension schemes and it was one of the things that kept people in crappy paying jobs.
We’ve seen private companies try to run things that are run in the public sector and it costs a hell of a lot more. Is that more productive then? No.
The problem with the public sector is generally the type of work they have to do. It, but its nature, isn’t easy to achieve good outputs
Having worked in both public and private I know both and the real problem in public sector is getting rid of poor staff. Nigh on impossible.
So, for the general working person. I can see that we will get to the point of not bothering with any sort of savings or pensions and just blowing the lot on cars, holidays, and whatever takes your fancy etc. Its not like we are seeing any sort of genuine improvement in the UK. So, the question is what are we working and saving for. When at every turn the gov want to take your hard earned money. Have savings do you?......tax man wants some of that, own your own house do you? tax man wants some of that...and it goes on. If you think you are getting a crap deal now, just wait till we go cashless. Will they go after the royal family who avoided paying inheritance tax after the unfortunate demise of the queen? Working most definitely needs to be rewarding, or there's just no point.
Precisely why there is an imperative to become cashless. They will be able to see every transaction and yet another reason to support cash.
@@dontuno
Try explaining that to the 🐑🐑🐏🐑🐏🐑
Why don't you stop working now then and spite the government? No-one is forcing you to work. If you choose to, please stop whining. It is your choice and no-one else's.
@@MarkPayne-k7lI think the whining would be caused by changing rules today that effect past choices based on past rules. There’s a point of principle there it’s retrospective which is unusual and not incremental again unusual
@@wallace-bv4rl Then people should take advantage of the very generous seven-year rule. The reason so many do not is that they do not trust their offspring to look after them once the dosh is in their sticky little hands. So why leave the little parasites anything anyway.? because parasites is what they by definition will be. The seven-year rule is the get out of jail free card for everyone. The rest of us are sickened by the unseemly whining going on. As for retrospective things, that is how governments have operated since time immemorial. We have all suffered from such sleights of hand but in this particular situation there is an obvious solution that is not normally the position in other cases. If one does not wish to follow my (free) advice, then it is their choice and no-one else's to continue building up the nest egg that would otherwise have represented totally unearned income for the beneficiaries. In the national context, which is the real issue, the more money that avoids IHT, the higher the taxes on earned income for all of us. How can that possibly be fair?
Elephant in the room is public sector pensions, as always.
As healthcare professional in the NHS, if they touched the pension I would leave immediately. Not exaggerating but it's the only thing worth staying for and so many colleagues say the same
@domobomomiles you'd start with new staff. Criminal that new people added into these unaffordable pensions. We might decide that that's all we needed to do.
@@jaaguitar With what incentive.. I am 27 years old and just finished 8 years of training. I could earn 30% more in the private sector but stay for the pension. If you change the pension to the same as offered in the private sector you'd have to increase wages by 30% to the same end. Yes the NHS needs reform but if you think cutting underpaid staffs effective wages is the answer then I wonder if you've considered this?
Whale in the fish tank, more like.
What you mean like the local government pensions? The ones where the scheme is in surplus. That paid for by the people contributing to it? There are a few councils where they have screwed it uo but the majority are well run. Labour want to move this centrally so that they can screw it up and retrospectively screw the people that have contributed for years. Government has already stolen 24,000 from my pension at today’s money by retrospectively moving my retirement date back. I signed up on a retirement age of 65 which they changed to 67. Paws off.
Passing money down through the generations is your right of choice. That the government want to skim off the cream because they can seems wrong to me. On pensions that have been tax free is understandable, but taxed savings to be taxed again is pure theft. Especially on assets that accrued value through inflation and scarcity value increase.
One issue that you haven't mentioned is assets outside the financial realm of contractual pensions and that is physical precious metals. They are safely stored out of sight. Do they have to be declared? Can they be passed to relatives without government intervention? I'm curious to hear your thoughts on this?
As you are talking about IHT, that is totally unearned income for the recipients. Why should they get a windfall free of tax. That would mean that we all have to pay even more tax on earned income than we should but do.Why can the little parasites not stop moaning? Or, you could spend it all before you die. Or, you could take advantage of the very generous seven-year rule.....of course as by clear implication you do not trust the little darlings not to after you once the transfer has been made, then why would you want to leave the little spongers anything anyway? I believe that to be impeccable logic, even if it has not been spelled out to you before. Search your feelings over this. Your true feelings about your descendants rather than just howling at the moon and boring us all to near death ourselves.
That is the problem with capital gains tax, it has become a capital loss tax due to inflation not being fully allowed for. There's nothing wrong with tax gains, but taxes losses is theft. It is similar to the distinction between tax avoidance and tax evasion. If the government starts to behave like scammers, there is no longer a moral case against aggressive tax avoidance schemes, well not from the government anyway.
Anything over 50% amounts to theft
Insightful video as always George, thank you 😊
Thank you, appreciate you watching and your kind words!
my father who died aged 102 paid the same amount in inheritance tax as he left to me as one of his 3 children
I have seen this a lot of times It is ridiculous
Any chance the '2027 consultation period ' will include the public ? To cut down on admin how about excluding small pension pots ? Most people impacted will work less /retire early ( so counter productive/growth) and draw down pension earlier imho
Clearly the amount you pay inheritance tax on should only be taxed for subsequent gains to those inheriting! Yes, not how the rules today would appear to apply. This is how it is for other assets outside a pension! Right!
Very interesting video Subscribed...
Many thanks. Very useful information.
Double taxation is nothing new , Take VAT on top of fuel duty
Agreed, but that doesn't make it fair.
Well said. 👏👏👏
What would be the effective tax rate of someone who inherits a large pension and an estate already subject to IHT and who is currently paying 40% income tax?
Great summary here, looking forward to the follow up video soon!
Thank you! Appreciate you watching.
Great video,thanks.You didn't comment how this change might push estates above £2m which from my understanding means you loose the residential allowance ? Appreciate if you might clarify this please.
Hi, yes very astute point!
I had this in the initial video and then cut it. Partly due to time on the video but also as the HMRC examples don't make reference to the MRNRB so it's not confirmed.
The approach I am taking as an adviser is to assume it does taper the MRNRB unless legislation is confirmed to the contrary.
Can you clarify the additional nil rate band of 175k for main home?
Everyone quotes the 175k figure, but I believe the figure is the actual property value or 175k whichever is lower.
Thanks for this and for bringing it to peoples attention. I think the media have gone very quiet on the pension changes and seem to be concentrating on the changes to IHT for farmers when in fact the IHT changes to pensions are far worse and are likely to affect more people. Realise you wanted to keep the calculations simple but its actually worse than in your example as the proposals say that the nil rate tax free allowance will now be aportioned between the pension and the rest of the estate so part of the tax free allowance will be applicable to the pension and the tax free allowance on the rest of the estate will be reduced. This has the effect of even higher taxation on the overall estate due to double taxation on the pension. I think for anyone this affects it probably makes sense to draw down the pension first with the aim of having nothing left in it on death whilst trying to save as much tax on the withdrawals as you can. It definitely makes financial planning even more complicated than it already was.
Good video. Is there any way we can complain about these proposals? I just feel we should do something about it, especially that annuities will be included, but not DB income.
Great video, very well explained. I Really like the fact your not just regurgitating the budget changes only, but also looking at practical tips and tactics for someone with a pension and ISA. Looking forward to your next set of videos. Would be really helpful, if you could touch on how to now drawdown your pension and ISA. l tax efficiently. Do you take from pension 1st or the ISA etc.
Keep up the good work
Mangal
Thank you! Really appreciate the comment as that's why I try to do. I've taken the view that the most valuable thing I can add is insights into strategies and tactics I'll be using and considering for my clients.
If I take an example of a couple with a £1m house and £1.35m pension pot in a SIPP that die in April 2027, the change means £540,000 additional tax on the SIPP plus the loss of the couples combined residence nil rate band allowance of £350,000, so total of £890,000 in additional tax on the estate? Have I understood that correctly?
that’s about the size of it
67%, I’m sure we can do better. What if your non pension assets are worth £2million and you have a £350k pension . The loss of the RNRB increases the marginal rate of tax significantly.
Love this comment! This was a part that got cut from the video (if it gets towards 20 mins + then I can risk viewing figures dropping off quite a bit as it's a lot for some on this area.) I did have in the video a comment that I thought now pensions are within the estate the RNRB should be dropped. It's already a very complex bit of legislation and they either leave it and people get hammered at the higher end of the wealth scale, or apply a carve out and make the estate administration extremely complex.
Welcome to the socilaist future of the UK.
You mean Communist!
The big fleece has started!
thanks -- how about if your pension takes you over the £2miilion limit - you then lose your nil-rate band allowance on this amount, adding a further 20% cost in tax on top of the 68%!!!!!!!!!!!!!
Good video. I think i need to spend spend and spend my pension otherwise my children will pay vast amounts in tax
Not if you take advantage of the very generous seven-year rule. Do you not trust your children to look after you once their sticky little fingers are on the unearned loot that they would receive? If not, why would you want to leave anything to parasites anyway?
@@MarkPayne-k7lmarks either got no children or more likely little vile specimens for kids and no cash. Chin up Mark
@@paul19vf21 Incapable of rational debate, Paul? You do not believe in a fair society as demonstrated by equal treatment for all, then? It is you perhaps that needs to keep his chin up if you are so bitter about the world. All I seek is fairness for everybody without preferential advantages for pressure group members. Like farmers. It is a pity that you cannot debate without being personally nasty with irrelevant comments made in total ignorance of the circumstances of other human beings who dare have a different point of view to you and who are sickened by the whining pleas for favouritism by certain groups.Favouritism that always comes at the expense of others.
the tax on your pension pot has made me start to think of retiring much earlier than i was , I rather liked the idea of being able to leave a substantial lump sum to my children outside of my estate but that has now gone , my thought process will now change but what I can say for certain is that neither myself or my parents inherited a pension so why should my children
So how complicated does it become with a non-resident overseas spouse? Seems all to complicated, especially if extended admin time after death. Things just keep getting worse, and worse.
Very informative. Subscribed.
Thanks and welcome
A primary motivating factor for people to work hard is to make the lives of their children easier. What seems particularly unfair about inheritance tax with the current thresholds is that if you live in the south because of the cost of housing you will not only pay a lot more for your house over your lifetime but it is likely that the value of family homes will push you above the IHT threshold when you die and your children will end up paying 40 per cent tax on the assets above the threshold. The original intention of IHT was to tax the wealthy not to tax people who worked hard to live in their own home.
If youre an average house however in the south you have seen massive unearned increases in the value of your house in the last 20-30 years - actually also to the detriment of your children who are suffering the dearth of house building. You might have worked hard to live in your house, but not in relation to its value.
If inheritance tax was 100% for everyone, the country would be far better off. We'd have more of a meritocracy and we'd prevent hoarding.
@@paulb6152 The value in my house is of little comfort when it is all going to be eaten up helping my children to get somewhere to live in this part of the country when they are middle-aged. Did you experience base rates of 13, 14 and 15 per cent in the 1980s as we did when we were all paying large mortgages in the south?
Sure did remember those rates well! But saying that it’s is all going to get eaten up by IHT is just wrong, if you are married there is a generous allowance anyway (one of my beefs is how this discriminates against singles who just don’t want to get married but that’s another story). Plenty of scope to give it away or set up trusts. I still come back to the main point… SIPPS and pensions were never supposed to be vehicles to avoid IHT and it’s now the situation as before 2015. Considering what Reeves could have done I’m finding the teeth gnashing on this issue way over the top
@@paulb6152 I didn't say that it's all going to get eaten up in IHT - read my comments again. It's likely that the value of my house will use up all of my allowances and any other assets will be taxed at 40 per cent. The high value in my house will all go when it is used to pay for high priced properties for, as I said in my second comment, my middle-aged children.
Is the 75 because you used to have to buy an annuity at 75?
It’s much worse than 67% for some people as suddenly inclusion of pensions may remove the IT allowance do you lose another 40%.
And if you put taxed income into your pension the even more
Up to 90% void go in quadruple tax take
I have 100k in my pension pot i am 66 and i have already taken my 25% tax free I am going to sit on my fund for now and when they move up tax tresholds i will start and withdraw every penny and enjoy it I own a company and i am not putting a penny more in pensions or ISA I am looking a loan trusts to invest now which i think will work well for my savings
Hello
My sister died aged 56 in July
Her estate is estimated to be about 1.3 million
She had a defined contribution pension with my 91 year old mother named as the sole beneficiary.
Do you know how long it takes to pay out to beneficiaries usually and why the pension company said it has to be dealt with by probate lawyers
Nobody has heard anything
Details matter, thanks, Principles Personal Finance!
Thanks David, appreciate your support as always! 🙌
my benificery lives in the Caribbean, and is never been to the UK
This budget is disgusting
What discussed you exactly?
All budgets are disgusting.
@@jstoner9029 the fact it attacks the private sector and protects the public sector (where MPs work). Goes back on their pre election promises, will cause even more hospitality destruction, will cause inflation to go up again and businesses to struggle. It is anti growth. And the OBR have said the 22bn black whole does not exist. Moving DC pensions into IHT when they are so vastly inferior to DB pensions is also an attack on anyone in the private sector trying to plan for a secure future for their children,
@@tancreddehauteville764 can you tell me why?
They raise money for school, health care, roads etc.
Maybe those are something not needed in Russian bot farms?
Reeves has actually done a better job than the conservatives did… she’s increasing investment into the public sector, education and nhs while increasing taxes in the rich slightly by
Increasing cgt (albeit not enough- should be higher)
Taxing businesses and farms worth over a million in iht (albeit they still get 50 % relief)
Getting rid of non dom status
And taxing pension pots - but this she should have put an exemption threshold on like there is for farms of say 1 million or so - this is where she’s done something stupid by taxing all pots when they should leave the smaller pots alone
The nhs pension is halved when it passes to a spouse (Essentially 50% tax) and if you are single disappears on death. No option to leave to children or any other beneficiary.
Thanks for watching.
The spousal/dependent's pensions differ between 1995, 2008 and 2015 Scheme for the NHS Pension.
There are also options for children's pensions that cease in broadly similar ways as described in the video.
... I still struggle to see the justification for why this should be different from a dependent's annuity, but perhaps it will be ironed out in the consultation.
The benefits you are describing are only if you die in service not if you die in retirement. As soon as you retire the rules are as I have stated. Can’t comment on other defined benefit pensions but definitely for nhs.
By the way I very much enjoy listening to your content! I personally think inheritance tax is the worst of taxes and that childless people are discriminated against as they don’t have the additional home allowance. I do have children so not personally biased in that opinion.
❤ clear explanation ❤ Thanks for sharing 👍
You're welcome, glad it was helpful!
I don't understand why pensions are done pre tax, it just seems to cause so many issues that wouldn't exist if they were done post tax.
Can somebody explain the IHT rules regarding inheritance to grown up children. It is £325,000 for the home then £175,000 x 2 right. But I assume the x 2 is if I am married? But can I leave £675,000 IHT free to to children if I am divorced, married but separated (wife not included in the will). Then is is £675,000 to my kids.
It’s (325+175) *2 I.e 1 million. When one spouse dies, the full allowance transfers to the surviving spouse.
Ok if I understand that correctly, when the first person dies it is £500,000 and when the second person dies they get £500,000 from before plus their own £500,000. And after 2027 the unused pension is included. Beford it was excluded.
@ no. The, the nil rate band is 325, the property allowance is another 175, becoming 1 million total for a couple. From 2027 the pension becomes part of the estate I.e. before it passed on tax free, now it will be taxed at 40% if no allowances can be applied to it (i.e. say the family home and an ISA came to 1 million quid), If an income is then drawn on it, the income will be taxed at the recipients nominal rate, so if they pay 40% tax, that’s another 40% on the remaining 60% giving an overall tax rate on the pension of over 60%. If you don’t have a home I.e. you’ve used the 7 year rule in time and already signed the house over, you have 2*the 325 remaining to cover the rest of the estate.
33k from a 100k pension is absolutely diabolical.
I missed it but what happens when the estate is less than a million, does the individual still pay 45% on the inherited pension per se as income?
Not sure I fully understand this but I think that if you are over 75 when you die with a DC pension your spouse or other beneficiary (eg child) gets taxed at their marginal rate when the money is accessed either as a lump sum or drawdown. This applies under the old and new proposed rules. With the new rules your beneficiaries may additionally pay inheritance tax on the pension pot when you die if the total value of your estate is above the inheritance tax threshold, hence some are calling this double taxation.
@ so for people that die over the age of 75 this change makes no difference?
@@jimbojimbo6873I believe that's correct - no change if your estate (now including your pension) is worth less than the thresholds eg a million if spouse pre-deceases you and leaves their estate and their half of the family home to you.
So, with a sizeable pension … and being 74, it seems better to cash it in and pay the 45 %, rather than leave it grow and hand over a 67% tax liability….
Does anyone think (hope) a different political party would reverse this proposed state grab on draw down pensions
IHT is the root problem , most people owning a house ( eg 3 bed semi on London) will have 'estates' increasingly caught be fixed IHT allowances ( some will have not raised for 20 years by 2030) . IHT was not intended to catch so many and like the family farmers it will mean more children who cannot get on the property ladder themselves will be forced out of family home to pay IHT. Inherited pension pots if die early would have helped pay the IHT bill , but that safety net has gone now as well.
So would you move your money from db sipp to enable money to be passed on
There is no such thing as a DB SIPP.....
Presently, so it would seem, the only cash you can release from a SIPP is the tax-free element, at least for now...... Probably best to draw down at the highest rate possible and gift as much as you can without leaving yourself short.
Glad im getting a citizenship in ireland.
Will put my long term wealth plans elsewhere..
how much does the tax payer contribute to private pension contributions, 20% or 25%? Why shouldn't the tax payer get some back? £600K pension pot, cloud cuckoo land, many just may say! What percentage pay IHT now, 4-6%? Google -average persons private pension fund value uk and one gets this- "According to the ONS, the median average UK pension pot is £32,700, yet this varies significantly depending on age and pension type. For 25-34 year olds, it's £9,300, but for 55-64 year olds it rises to £107,300."
A leopard doesn't change it's spots... same old Labour... tax the middle classes... despicable!
The problem is continuing with current spending in the public sector with a diminishing revenue from the private sector as growth reduces, wealthy and middle income people leave the U.K., companies close or are bought by a foreign company ( that pay taxes in their country). Taxes will need to increase to pay for health care, pensions, unemployment , health & housing benefits. But the private sector is approx 55% against 45% public sector. It’s unsustainable without growth in the private sector
if this is designed to stop people amassing a large amount of wealth in a pension pot and passing it on to future generations to avoid IHT then surely they should have an amount that's exempt. so maybe there should be an allowance off 500k
Public and Private investors should be treated the same.
Thank you. Basically pain now for us if we cash in SIPP money to give to offspring or pain later for them if we don't.
Bringing personal pension pots into the scope of IHT will mean 40% of the value of the pot will be claimed by the State. The remainder is then taxable on the beneficiary, probably also at 40%. Thus a £1M pot will be whittled down to £360,000, an effective tax rate of 64%. Is it not immoral for the State to take more than 50% of the value of a person's savings?
Labour has previous form in confiscatory tax rates, with 98% being its high water mark in the 1960s.
Germany, pre-unification, gave us the perfect comparison between enterprise and a socialist command economy, with its car industry. In the West, choose from VW, Audi, BMW, or Mercedes Benz. In the East, join the waiting list for a Trabant.
Michael Bishop
About to retire
Before pensions came more flexible you would have a company scheme or buy an annuity, both may give a spouses pension but nothing after that. Flexible pensions were meant to help by giving you more flexibility when you wanted to retire and not having to buy annuities, as now poor rates, not to give to your children a tax benefit when you died. Why should the government give you tax relief on contributions to help your children inherit more money, the tax efficiency is there for your retirement
Well said - some of the reaction is downright hysterical to these changes - SIPPS are meant to be for your retirement and not a handy tax dodge to avoid IHT - for goodness sake transfers to spouses are still exempt.
Due to extremely poor annuity rates and the volatility of DC funds to markets conditions people were just not investing in their retirement. This was heading the UK towards a serious state pension crisis that both parties recognised. (David Blunkett is still very vocal about this issue). I think there is a strong argument that the changes were too generous, but that was to drive change. Tax was always payable if the person died after the age of 75, which according to government figures was the majority of people. I also question that you would plan a tax dodge by purposely hoping to die early. From what I have seen the issue people have is not having to pay tax but the fact this could attract a 67+% rate that will once again discourge people investing in their future. In that situation everyone loses.
IHT is making it much less attractive to work longer into retirement age, this is completely opposite to what the government wants or the country needs!
For doctors and hospital consultants, the golf course beckons at an earlier age..
If workers and poor don't pay more tax, then the rich will have to.
And we can't have that can we.
I thought I had mites on my phone screen. 🥴
It never made any sense why pre 75 was tax free and not after. I wonder how many people were bumped off at 74 🤨
The 75 rule goes back to the old annuity cut off (before 75 the annuity provider had to refund a portion of the cost after 75 they kept it all)
I suspect this is still buried in legislation and can’t be unwound
Reform voters, remember... YOU did this.
Does this apply to SIPP pensions too? Thank you.
Yes, it does. A SIPP is a private pension
@@chumabanjwa4662 Thanks
Paying tax from the napoleonic war STILL
Apparently pension providers cannot undertake trades once a death has been reported, until probate is granted. Hence they may not be able to readily liquidate investments and pay any determined IHT until probate is granted. Six months - a joke.
Wouldn't surprise me if there were many issues surrounding things like that. The legislation definitely needs ironing out.
And at what point do they value the pension for IHT purposes if it's invested? A 0.5-1% change a day isn't unusual but could make huge difference to the value and the amount paid.
£100k pension that's all liable for IHT is a £40k bill, but the value drops 40% before you get to pay it (not unheard of) and suddenly you're left with £20k and you then get to pay income tax on that.
Time to start burying gold bars and hope the kids remember to dig them up before selling the house...
the bigger problem is you have to pay an estimate of the IHT upfront, but you can't realise the assets untill probate is granted, so you need some kind of bridging loan to cover the 14+ weeks probate takes plus the time to realize the assets - sell a property, liquidate part of a pension fund etc.
@@hooksforestchin As I understand it, and please don't quote me, you can buy up to £10K gold without an audit trail. Certainly you can buy gold and there is no CGT to pay on it.
@@dontunono cgt only on gold coins (Britannias, Sovereigns) I believe
IHT isn't (at least for the most part) double taxation, or at least no more so than capital gains tax is. The vast majority of it comes from capital gains, from property and shares etc, which would have attracted CGT if crystallised during the owner's lifetime, and from pensions that were saved tax-free and would have attracted income tax had the holder drawn them down. The IHT exemption for pensions always struck me as excessively generous, and has led to the perverse situation of the very wealthy using pensions solely as a doubly tax-free gift to their offspring. On top of that, if paying tax after I'm dead somewhat reduces the amount I'm paying while I'm alive, then I'm all for it.
And a huge chunk of capital gains is a tax on government created inflation, not growth because they got rid of indexation years ago. You take the risk, you can make a real terms loss and still get taxed to the hilt on it.
For the average Joe like me it won't effect me
The public sector pensions are largley unfunded and paid out of tax about 60 billion a year if discount the employer contributions which are largly a paper exercise to off set the cost of penions in payment if all public sector jobs stopped the 60 billion odd a year would still be paid the 60 billion that is reduced on paper with employee contrbutions that are double counted as a contribution then used to off set pensions on paper rather than invested etc. Its not very robust as no displine of the market i am on lower pension expectation based on the same contriution as others because through discrimination that would not get in first tier system like germany US switerland meaning the dont count my orginal start date people that joined later and have paid less get more.the public sector pensions enable this type of corrupt as other than councils neither funded nor costed. The public sector transfer club wherre people put on final salery years after schemes closed on non funded pincal of this questionable approch
It’s a real “crabs in a bucket” budget. The end result is no incentive to work& save leaving Labour voters wondering wHeR dEr MonEy coME frUm?
If you have that much money you should pay tax
People with fuck all are always happy to share
The devil is always in the detail it seems. Great insight!
Yes, the devil is also in 11 Downing Street!
@@C2112-s7y 😅 bless her, she’s got a hard job, can’t get blood out of a stone and I’m sure some of the impacts are those pesky old ‘unintended consequences’
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This could affect (up to) 38,000 estates each year. In the week ending 18 October 2024 (Week 42), 10,785 deaths were registered in England and Wales. That equates to 560,820 each year. So you are talking about the top 6.8% of the wealthiest people but only if they did nothing and died intestate. Stop making up scare stories. The UK economy needs a boost and paying for childrens education, healthcare and other essential public services. This whinge truely affects very few mega rich people who should pay more tax
This rant about pension inheritance is not appropriate. Pension funds were never designed to be inherited by the children of the beneficiary - this was never the intended purpose. The purpose of a pension is to provide an income for the beneficiary and, possibly, the marital partner of the beneficiary. Not anyone else. Defined benefit pensions cannot be inherited, they either stop with the death of the beneficiary or they are paid out at a 50% rate to the partner of the beneficiary until they also die.
I respect your views and appreciate you watching my content, but the interpretation of the video here is off.
I didn't 'rant' about inheritance. I actually make clear in the video that pensions were designed with the understanding that tax would be paid at a later point, making clear the holes in current legislation around age 75. The conclusion you've reached appears to be a strawman of the video, not what was actually said.
Any criticisms were around the inconsistencies with DB dependent's income and annuities, the areas of legislation that need to be ironed out to avoid huge admin issues and an acknowledgement that those who are unmarried will be heavily affected.
This will destroy pension saving in the UK which is what they desire as they see the tax relief as 'giving you' money, when in reality they are letting you defer your tax in the hope that you will not rely solely on the state in retirement, but with the adverse tax treatment and complexity after death and the risk of future rule changes, this means pensions are going to be seen as too risky.
no it won't. stop being so dramatic.
@@matthjas67 I assume your a lefty based on the reply with zero facts in your argument?
Don't you love it when the government frame the 'tax relief' as government money, 'giving you' money as you say. Not a single penny of that money was given to you by the government - you had to earn it. If you hadn't earned it it wouldn't exist.
It wouldn’t be the first time where legislation and processes are put in place in the pension sector. Currently there are delays, and deadlines are being missed, with the McCloud judgement due to government departments not thinking through the process and mapping it correctly.