The UK government's plans to introduce inheritance tax on pensions have been met with criticism from experts, who argue that the system will become too onerous for families to navigate. According to the proposals, inheritance tax will be levied on estates worth over £2 million, including pension pots.
However, experts warn that the system will be unfair and burdensome for many families, as they will have to chase up pension companies for vital information. This includes details such as the value of the pension, any tax-free cash taken, and the date of death. The complexity of the process is likely to lead to delays and increased costs for families.
The move has been met with criticism from the pensions industry, with experts pointing out that the system is already overly complex. 'This is a recipe for disaster,' said a spokesperson for the Association of British Insurers. 'Families will struggle to navigate the system, and it will lead to delays and increased costs.'
The plans are part of a broader effort to raise revenue and address budget pressures. However, experts warn that the move could have unintended consequences, including driving people into tax avoidance schemes.
'We need a more comprehensive system that takes into account the complexities of pensions,' said a spokesperson for the Pensions and Lifetime Savings Association. 'This is a simplistic approach that will only serve to create more problems.'
The move is set to come into effect in 2025, giving families a two-year window to prepare for the changes. However, experts warn that the system will be difficult to navigate, even for those who are prepared.
'We urge the government to rethink these plans and come up with a more comprehensive system that takes into account the complexities of pensions,' said a spokesperson for the Association of British Insurers.