Many people may be planning for retirement based on outdated assumptions around government policy, including inheritance tax but also a rising state pension age, according to Schroders Personal Wealth.<\/p>\n
The Government announced in last Autumn’s Budget that it will make pensions liable for inheritance tax like other assets such as property, savings and investments starting from April 2027.<\/p>\n
The basic threshold for inheritance tax \u2013 known as the nil-rate band \u2013 is \u00a3325,000, or if you are leaving a family home to direct descendants it\u2019s \u00a3500,000 \u2013 double those figures if you are a couple.<\/p>\n
IHT is charged at 40 per cent on assets above those thresholds, but spouses are exempt until the second partner dies.<\/p>\n
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Inheritance tax: Pensions will be counted alongside other assets such as property, savings and investments starting from April 2027<\/p>\n
Meanwhile, the age you can start drawing the state pension<\/a> – worth \u00a312,000 a year if you qualify for the full amount – is due to rise from from 66 to 67 between 2026 and 2028.\u00a0<\/p>\n In April 2028, the minimum age for accessing workplace and other private retirement pensions<\/a>\u00a0will also go up, from 55 to 57.<\/p>\n > Read more: Our pick of the best self-invested personal pensions<\/a><\/p>\n Schroders Personal Wealth, which surveyed 1,500 people across the country, found:<\/p>\n – One in four over-45s with a household income of \u00a350,000-plus plan to pass on unspent pensions to their family when they die, but the overwhelming majority admit they don’t fully understand IHT rules;<\/p>\n – When it comes to financial plans, 43 per cent don\u2019t have an up-to-date one and 26 per cent don’t have one at all;<\/p>\n – On the value of their pensions, 22 per cent have no idea what they are worth, and that rises to 28 per cent among those aged 65 and over;<\/p>\n – Some 60 per cent of those polled had not taken financial advice about retirement.<\/p>\n – One in 10 feel ‘extremely confident’ about their financial future in retirement, but nearly a third rated their confidence at between 0 and 4 out of 10.<\/p>\n Alex Gaita, financial planning director at Schroders Personal Wealth, says: ‘Retirement planning doesn\u2019t happen in isolation \u2013 it\u2019s shaped as much by shifting laws and government decisions as by personal goals.<\/p>\n ‘Yet over half of people are unaware of upcoming changes. With tax rules likely to evolve and fresh uncertainty around the upcoming Budget, too many are planning for the future based on assumptions, not facts \u2013 a risky disconnect.’<\/p>\n He offers the following tips on staying on top of pension changes.<\/p>\n
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