The change, announced at last year’s Budget, is expected to cost the wealthiest half of pensioners £680 on average, according to think tank The Resolution Foundation.
Greg Moss, of financial planner Eleven.2, said the policy had “disproportionately harmed” Gen Z financially as they previously would have stood to inherit pensions tax-free.
He added: “They don’t have enough money to save. The UK is not a productive economy and they’re being taxed into oblivion in order to fund the state pension and other expensive benefits – you can’t tax the population like this and expect them to save long-term.”
Millennials also expressed the same view, with 20pc saying they were relying on a handout instead of savings.
Mr Moss added that the cost of living had resulted in Gen Z clients opting out of gold-plated public sector pensions, which provide guaranteed pensions for life in retirement, rising each year with inflation.
“Doctors and nurses are opting out,” he said. “They are having to make a trade-off for day-to-day costs. When that is your mindset, the idea of providing for your retirement feels low priority.”