Other News
Retirement Worries
Research by WEALTH at work has revealed that the number of people who believe they will never be able to afford to retire has increased due to the impact of the increased cost of living. 45% of workers now say they will never be able to retire, up from 39% a year ago and 33% in 2023.
The most concerned were those aged 35 to 44 with 51% saying they would not be able to afford to retire.
Overall, 81% of people surveyed thought that they would have a less comfortable retirement due to the increased cost of living and 80% believe they will have to work longer. The full report is available to download here.
Inheritance Tax on Pensions
In the Chancellor’s Autumn Budget, it was announced that Inheritance Tax (IHT) would apply to pension funds from April 2027. This has now been confirmed but with some changes to the original plans.
It was thought that death benefits would also be included but, after some push back from the pensions industry, HMRC have now confirmed that death in service benefits will not be subject to IHT.
Another change to the initial plans is to who will be responsible for reporting and paying IHT. Originally it was proposed that Pension Scheme Administrators would have this role. However, after consultation, the government has said this role will now before the personal representative who are already responsible for administering the estate.
Pensions Commission
The Government has relaunched the Pensions Commission. The original Commission, which ran from 2002 to 2006, played a key role in simplifying the State Pension and introducing Automatic Enrolment.
The new Pensions Commission will focus on improving retirement outcomes and shaping the long-term future of the UK pension system. Government statistics show that 45% of working adults are not saving anything into a pension, and many are not saving enough for retirement.
Pensions UK (formerly the PLSA) will be working with the Commission and has stated that higher pension contributions must become the norm. The Pensions Regulator has also expressed its support for the initiative. You can read more about the new Pensions Commission here.