UK Government Considers Pension Tax Reforms

Chancellor Rachel Reeves is facing pressure to reform pension tax reliefs, which may include introducing a 'death tax' on pension pots, a move that could significantly impact beneficiaries. Many analysts warn that proposed changes to inheritance tax could disproportionately affect ordinary families, with Devere Group's Nigel Green highlighting a surge in consultation requests as families seek to protect their wealth ahead of the upcoming Budget. Additionally, there has been a notable increase in contributions to Self Invested Personal Pensions (SIPPs) and withdrawals, driven by fears of impending tax changes, with experts cautioning against hasty financial decisions. The government has promised not to raise income tax or VAT but has left the door open for pension-related reforms, causing unease among savers. Experts argue that reducing the tax-free withdrawal amount could force retirees into debt or delay their retirement plans, with significant implications for homeowners. Overall, the October Budget is expected to bring tough decisions aimed at addressing a £22 billion gap in public finances, with pensions firmly in the spotlight.