Dependants' drawdown tax charge quirk scrapped

Budget documents reveal change

Jenna Towler
clock • 1 min read

Rules forcing dependants to take inherited pension assets as a lump sum at age 23 are to be scrapped.

Talbot and Muir head of pensions technical Claire Trott explained since death benefit changes were introduced children who are deemed ‘dependant' have faced a problem. "When they reached the age of 23 they had to cease income or pay additional charges to access the funds after this age." The government has today pledged to change the situation in the Finance Bill. It said the changes would mean the 23-year-old would "not have tax charges of up to 70% on any payments received from that date, and aligns their tax treatment with that of a nominee of the member". Trott (pictured) said:...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

Ex-pensions minister Ros Altmann shares 12 potential Budget pension reforms

Ex-pensions minister Ros Altmann shares 12 potential Budget pension reforms

‘Chancellor should aim to change as little as possible in the near term’

Professional Adviser
clock 14 October 2025 • 5 min read
Govt forced to respond as pension tax lock petition secures 14,000 signatures

Govt forced to respond as pension tax lock petition secures 14,000 signatures

Started by AJ Bell ahead of 26 November Budget

Jenna Brown
clock 13 October 2025 • 1 min read
Petition pushing government to protect pension tax incentives gets 3,000 signatures

Petition pushing government to protect pension tax incentives gets 3,000 signatures

AJ Bell pushes to end ‘damaging speculation’ on tax-free cash and reliefs

Jenna Brown
clock 07 October 2025 • 2 min read