Early pension access could lead to 55% death tax

The Treasury's consultation on early access closed on 24 February. However, according to Treasury correspondence with AJ Bell, two of the four early access models proposed in the paper would lead to punitive tax charges on the remaining fund if the pensioner dies. Under the current tax regime, accessing the 25% tax-free lump sum before age 55 or permanently withdrawing funds in the case of an emergency would be classed as benefit crystalisation events (BCEs). BCEs make the remaining funds in a pension liable to a 55% tax charge on lump sum death benefits. "Any solution that is s...