A new survey has revealed overwhelming opposition to the introduction of inheritance tax on pensions among industry professionals.
In October, Chancellor Rachel Reeves announced that from April 2027, pensions will no longer be exempt from inheritance tax.
However, a survey by WBR Group found 90% of respondents agree that the introduction of IHT on unused pensions is both retrospective and unfair and 97% of industry professionals believe that the proposals force pensions into an IHT regime that does not accommodate the practicalities of current pension rules or administration processes. WBR said the sentiment reflects the industry’s concern that the proposed changes are impractical and could lead to “significant administrative challenges.”
In addition, 97% agree that trustees and providers will incur additional costs to administer the proposals, which are likely to be passed on to consumers, with 98% agreeing the proposals will act as a major disincentive for consumers to engage with pensions.
Furthermore, 100% of respondents agree that the proposals assume the estate of a deceased pension scheme member has the timely information and liquidity to cover any IHT due.
In response, the SSAS administration and tax advisory services provider has urged the Government to reconsider its proposals and work in collaboration with the pensions industry, calling the current plans “a looming disaster.”
Caitlin Southall, head of SSAS proposition at WBR Group, said: “The proposed introduction of IHT on unused pensions is not just a concern, it is a looming disaster for the pensions industry. These changes are not only impractical but also a grave injustice to those who have diligently and responsibly saved for their retirement.
“We implore the Government to reconsider these draconian proposals and collaborate with pension experts such as us to forge a more balanced and equitable solution that truly supports long-term pension savings. The future financial security of countless individuals hangs in the balance.”
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