Keir Starmer has warned the upcoming October Budget will be “painful” but pensioners are holding out hope that they will not be targeted by the Chancellor’s extreme measures.
Addressing the nation, the Prime Minister suggested “those with the broadest shoulders should bear the heavier burden”.
Estate planning expert Steve Bish told GB News: “Currently, pensions can't be subject to the hated inheritance tax and the beneficiary receives them relatively quickly as there is no need to wait for a grant of probate.”
He added: “How the Government plans to implement yet another attack on pensions is unclear but judging by past comments made by certain senior Labour figures people are right to be worried.”
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However, suggesting another option, Rahul Kotecha, Trusts, Estates and Tax Director at national law firm Freeths, said: “The Government may choose to take away the 'benefit' of dying before 75 by making all income withdrawals subject to income tax.”
He added: “The Government may also decide to include the value of pensions pots in an estate for the purposes of IHT (similar to what ISAs are now).
“Due to the potential backlash, they could introduce an IHT pension allowance so the value of the pension over this allowance would fall within an Estate for IHT purposes, which is similar to the Residential Allowance that applied to properties owned and left to descendants.
“Another option that could be looked at to collect in taxes, is to reintroduce the pensions lifetime allowance was removed in March 2023. The lifetime allowance was a limit on the value of pensions before a 55 per cent tax charge was taken if taken in a lump sum.”
In the exclusive poll for GB News membership readers, an overwhelming majority (99 per cent) of the 2,949 voters do not trust Labour with pensions, while just one per cent think otherwise.