Former Pension Minister, Ross Altmann, is concerned about a problem created by the NEST pension scheme which predominantly involves low earners – although it could soon impact those with larger funds too.
“Nest (the Department for Work and Pensions-sponsored pension scheme of last resort with more than four million members) pays death benefits on a non-discretionary basis, forcing unused pensions into their estate and therefore open to Inheritance Tax.
Nest is the largest auto-enrolment workplace provider and has just removed its contribution cap and started accepting transfers at an attractive 0.3 per cent annual charge. Yet its members risk losing 40 per cent of their savings unnecessarily. Most Nest savers will be unaware of this problem and swift action to remedy such an injustice is important.
Surely we have had enough pension scandals over the years? It is shocking that new ones are being created by the Government itself.”
A very well made point from Ross Altmann. Why have the Government set up such a scheme and taken away one of the most valuable benefits a pension can provide – the potential to be inheritance tax free ?
It is always worth remembering legislation is one thing but contractual terms can be another. If you would like to discuss the death benefit set up of your own pension contract(s), please contact us >>