Inheritance tax raid is disaster for pensions: Attack 'horribly reminiscent' of Gordon Brown plundering dividends in 1997
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Labour’s ‘bombshell’ plan to levy inheritance tax on retirement pots will hit Middle England and leave millions in poverty, according to a former pensions minister. Ros Altmann argues the Chancellor’s raid on prudent savers is ‘horribly reminiscent’ of the ‘fatal blow’.
Gordon Brown inflicted when he removed dividend tax credits from UK pension funds in 1997. Writing in the Mail, she warns Rachel Reeves that the new death duty is ‘more like confiscation than taxation’ and could ‘destroy’ the pensions system. And the boss of City wealth manager Quilter has warned that the move risks ‘undermining savers’ confidence’.
In her first Budget, Chancellor Reeves said that from April 2027 pension pots will no longer be exempt from inheritance tax (IHT). Currently, money left in a pension, on death, can be passed on tax-free. Tax grab: The current Chancellor's raid has been compared to the 'fatal blow' Gordon Brown (pictured) inflicted when he removed dividend tax credits from UK pension funds in 1997.
But tens of thousands of grieving families now face a new death duty on pensions that will rake in £1.5billion a year by the end of the decade. ‘The bombshell Budget inheritance tax announcement is a potential disaster for pensions,’ says Altmann in the Mail today.
‘It will mean less money going in, more early withdrawals, lower pension fund investment in long-term higher-return assets and more pensioners reliant on state benefits. ‘Millions are at risk of later-life poverty. The UK economy and markets will suffer too as less pension money stays invested for the long-term. It’s time to wake up.’.
