IFAs concerned over proposed pension death benefits tax rule changes

IFAs cite ‘impact on clients’ financial plans’ as reason for apprehension

Sahar Nazir
clock • 2 min read

The majority of IFAs are apprehensive about potential alterations to pension death benefits tax rules proposed by the government as it will “impact clients’ financial plans”, according to Standard Life.

Just over one in ten advisers have expressed support for the changes. This is according to a study conducted among 207 IFAs from 10 to 15 August 2023. Currently, if a pension owner passes away before the age of 75, their pension is passed on tax-free to nominated beneficiaries. If the pension owner is older at the time of their passing, the pension is taxed at the beneficiaries' marginal rate. However, the proposed alterations would require nominated beneficiaries to receive the pension either as a lump sum outside of a pension wrapper or as an income, taxable at their marginal rate. ...

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