HMRC warning as 'retirement savings at risk' from new inheritance tax rules

NewsHMRC warning as 'retirement savings at risk' from new inheritance tax rulesPensions will be subject to inheritance tax (IHT) from 2027, according to research from Charles Stanley Direct,

which says retirement savings could be 'under threat'coventrytelegraphBookmarkShareNewsByJayne ThomsonJames RodgerContent Editor14:26, 17 JAN 2025BookmarkRetirement savings are "under

threat" after the announcement that pensions will be subject to inheritance tax (IHT) from 2027, according to research from Charles Stanley Direct.

Our free email updates are the best way to get headlines direct to your inbox

More Newsletters SubscribePlease enter a valid emailSomething went wrong, please try again later.More NewslettersWe use your sign-up to provide content in ways you’ve consented to and

improve our understanding of you. This may include adverts from us and third parties based on our knowledge of you. More infoThank you for subscribing! We have more newsletters

See OurPrivacy Notice See OurPrivacy Notice×Group 28

Our free email updates are the best way to get headlines direct to your inbox

provide content in ways you’ve consented to and improve our understanding of you. This may include adverts from us and third parties based on our knowledge of you. More info×Group 28Thank

you for subscribing!

We have more newsletters

People's nest eggs are in danger after HMRC decided that from 2027, pensions will be hit by inheritance tax (IHT), Charles Stanley Direct's research has found. A survey revealed

that more than a quarter of investors (26%) are looking to take money out of their pension pots "as early as possible" to avoid tax hits.

But Rob Morgan, Charles Stanley's top investment analyst, warned: "Clear risks arise when pensions are drawn down prematurely or contributions are reduced."

He stressed the importance of careful planning, saying: "Decisions made without forensic attention to detail and consideration of all long-term outcomes can lead to unfortunate consequences

in retirement."

Read more: New CGI shows massive make-over plan for distinctive Coventry pub

Sign up for our FREE daily newsletter here for all the latest news about Coventry.

Mr Morgan also commented on the impact of policy decisions, noting: "The Labour Party Chancellor's decision to include pensions within the inheritance tax umbrella is affecting investor

behaviour already, two years before the changes come into effect."

With IHT thresholds set to stay the same until 2030, he understands why families want to shield their assets as more estates will likely have to pay the tax. However, he emphasised the need

for expert financial advice, adding: "With each individual having their own desired outcome for their estates, it's vital that professional financial advice is sought so that they can

have the right plan in place.", reports Birmingham Live.

The survey revealed that 26% of 'DIY investors' intend to withdraw their pension funds as early as possible to utilise them in a more tax-efficient manner. Additionally, 21% plan

to withdraw funds to gift to family members, while 18% aim to deplete their pension pot more quickly to remove it from their estate.

As a result, inheritors may face combined tax rates of 52%, 64%, or 67% on inherited pensions, depending on their tax bracket, if the total assets exceed the £325,000 IHT "nil-rate band".

Story SavedYou can find this story in  My Bookmarks.Or by navigating to the user icon in the top right.

Follow CoventryLiveFacebookX (Twitter)More OnLabour PartyPolitics