Bonus episode: The big questions people are asking on pensions and inheritance tax - and the answers
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This is Money Podcast
This episode is titled:
Bonus episode: The big questions people are asking on pensions and inheritance tax - and the answers
Notable Quotes
"Money is only useful to you insofar as it's spent in a certain sense."
"While you're alive, you've still got your beady eyes on your children and what they're doing. Once you're dead, they get the money and you've got no idea what happens."
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Get More InsightsEpisode Summary
In this special bonus episode of the This Is Money podcast, Simon Lambert welcomes back Lisa Kaplan from Charles Stanley Direct to discuss pressing questions surrounding pensions and inheritance tax as they become topics of heightened concern due to recent government announcements. They explain that from April 2027, pensions will be included in inheritance tax calculations, which could significantly increase the number of estates subjected to this tax, shifting how people view and plan their pension utilisation.
Lisa outlines that currently, only a small percentage of estates pay inheritance tax due to allowances, but the new rules will double the estates impacted. The discussion highlights the need for individuals to rethink their pension strategies, emphasizing the importance of spending and enjoying money in retirement rather than treating pensions merely as inheritance vehicles. They explore the generational shifts in pension use, noting that younger retirees are increasingly reliant on defined contribution schemes.
As they delve deeper, Lisa provides insights into practical steps listeners can take regarding their pensions and inheritance tax planning, such as giving gifts now rather than later to avoid tax implications, alongside the legalities of personal finances in relation to care costs. Lisa encourages proactive financial planning and reassures listeners that seeking advice early on in the inheritance tax process allows for more options. The episode culminates with advice on preparing for the upcoming budget changes without making rash financial decisions based on speculation.
Lisa outlines that currently, only a small percentage of estates pay inheritance tax due to allowances, but the new rules will double the estates impacted. The discussion highlights the need for individuals to rethink their pension strategies, emphasizing the importance of spending and enjoying money in retirement rather than treating pensions merely as inheritance vehicles. They explore the generational shifts in pension use, noting that younger retirees are increasingly reliant on defined contribution schemes.
As they delve deeper, Lisa provides insights into practical steps listeners can take regarding their pensions and inheritance tax planning, such as giving gifts now rather than later to avoid tax implications, alongside the legalities of personal finances in relation to care costs. Lisa encourages proactive financial planning and reassures listeners that seeking advice early on in the inheritance tax process allows for more options. The episode culminates with advice on preparing for the upcoming budget changes without making rash financial decisions based on speculation.
Key Takeaways
- Pensions will be included in inheritance tax calculations from April 2027, affecting more estates.
- It is suggested that people should spend and gift their money now, rather than hold onto it for future inheritance.
- Pension pots should be viewed primarily as income sources during retirement rather than merely for inheritance.
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