The House of Lords appears to be fighting a rearguard action to keep the wealthy wealthy if they choose to keep their pension savings in “pots”.
Of course many rich people chose to take their pensions into pots in the decade leading up to the pension transfer crash in 2022. It seemed a good idea to have your pot in a tax-free pot to pay to the next generation. If money had stayed in pensions (DB pensions) this would not have been a question , the pension would have paid till you died and then so long as your spouse or dependent lived.
But the wealthy didn’t see it that way, they saw up to 40 times the pension as a CETV and grabbed their money. I was at an FT event where a certain Lady who is now a Baron argued for taking DB transfers while the going was good.
The spurious argument being used in the House of Lords is that executors are ill-prepared to meet the 2027 deadline when pension pots left undrawn or un-annuitized or swapped for CDC pension will be punished.
The violins are very small. The executors have already had two years to get their act together and they have another year to get prepared. But we are supposed to feel sorry for all on wrong side of inheritance tax thresholds.
My advice to those terrified of inheritance tax is to talk to a good broker such as Retirement Line about purchasing an annuity for yourself and those dependent on you. You should get a great annuity for the money that came out of your DB plan and if you want to keep your money invested, get a good adviser or wait till Retirement CDC in 2028.
Pension pot-holders – you should not find yourself inconvenienced when you die, nor need your inheritors. That you have an inheritance tax liability tells me you are in a financially advantaged position. You’ve had 2 years – you have 1 still to go.