I remember going north on a train  and explaining to a jolly lady that I had the job of stopping people becoming pension muppets. The following day she was there at the conference explaining to the crowd that she’d met someone worrying about people becoming pension muppets because of pension freedoms. I think she was as surprised to see me in the audience as I was surprised that she was compering the event. She was Claer Barrett, who I continue to enjoy, even though she and I live very different lives!

The articles’s in today’s FT and she’s reacting to the same report from LCP that I am. You can read about the good news for the Treasury in my previous blog – here.

As I’ve said elsewhere, if you’re rich enough to worry about Inheritance Tax then you are rich enough to pay for your FT subscription. I am hoping that these brilliant FT adverts will keep me on their right side. Here is Claer’s illustration

Oh my God (OMG) , you have two choices, spend your money and end up poor or save it for your inheritors and give them a tax-bill.

Thankfully we have financial advisers who are hard at solving the problem

To avoid this “double taxation”, financial advisers and their clients are weighing up the merits of upping pension withdrawals. These would be subject to income tax, but prudent use of gifting allowances (including the so-called “seven year rule”) could lessen IHT liability, or remove it altogether.

OMG, spend your retirement savings on being happy! Sounds a brilliant idea, one that no-one had ever thought of before. What follows reminds me of the discussions being had by trustees and consultants over what we should do with surpluses in DB pension plans

David Hearne, a chartered financial planner at FPP, says the measures will reshape the great generational wealth transfer. Many of his clients are now considering making regular pension withdrawals (incurring income tax on the way out) and funding pension contributions for their adult children, who will receive tax relief and employer contributions on the way in.

It’s not quire DB to DC but for 100.000 people who took a DB/DC transfer it could be a DB to DC to someone else’s DC transfer. The beauty of course is in offsetting income tax and deferring IHT.

OM (bloody) G!

Claer concludes her piece by pointing out that most people by 2060 won’t have any private pension, just a pot. I think this unlikely.

People will have a state pension which remarkably keeps growing from year to year and I suspect that the majority of us by 2060 will have got tired of all this jabber about income and IHT tax and be more interested by the amount of income they are getting.

That’s because the muppetry that was introduced in 2014/15 by Mr Osborne will become a thing of the past. I suspect that people will look at the opportunities to buy a lifetime income from an annuity provider or a pension scheme that gives them entrance so long as they want to become a pensioner.

The muppetometre continues at “high to exploding” as people’s pots grow. Their muppetry will become more evident to them with the introduction of the pension dashboard, We are going to see a new attitude to pensions because people want 100% security and the rates of pension they can be offered when they are 100% invested,

Muppetry is on its way out