State Pension

[chriss999]

It will only "attract IHT" if the total estate is above whatever threshold is in place when the pension holder dies. Just because, from April 2027, an extant DC pension pot for instance will be considered as part of the estate for IHT purposes does not mean that IHT will be payable.

Only 4%-5% of estates actually pay IHT at present. This will of course increase when DC pensions are counted as part of the estate but one estimate for that suggests the number will rise to around 8% of estates having to pay anything. The vast majority will not pay. Those sufficiently wealthy to believe that this is a concern often seek professional tax advice to minimise this exposure one way or another. There are several ways of reducing that tax liability legitimately - gifts from income, use of the 7-year rule etc.

Furthermore, there is at present, no income tax payable on inherited pensions when the pension holder dies before the age of 75.

Why do some people seem to think that tax is a problem?
When we pay tax we contribute to making the country a better place. We all benefit from taxes that other people pay, so it makes sense for each of us to embrace our own tax bills. Especially IHT on our estates, which we don’t even need to pay ourselves!

 

[seeSimon]

That is not the case - I think most civil servants are now on a career average scheme, so still generous and guaranteed although calculated differently to final salary.

I'm not sure that the civil service scheme is particularly good, it's more the case that most others are nowadays even cr@ppier? It's all relative...we've all been had...imho...

And I have about 60/40% of my working life split across commercial and civil service, and pensioned accordingly.
My CS scheme will pay my widow during her lifetime, but there's no "inheritance issues"...some sort of guaranteed income, but there will be nowt for the kids.
This is unlike my PPP...perhaps/hopefully...

I do also know that both my father and step father's commercial sector pensions were far, far more generous than my mothers civil service payments.

 

[bedouin]

I'm not sure that the civil service scheme is particularly good, it's more the case that most others are nowadays even cr@ppier? It's all relative...we've all been had...imho...

And I have about 60/40% of my working life split across commercial and civil service, and pensioned accordingly.
My CS scheme will pay my widow during her lifetime, but there's no "inheritance issues"...some sort of guaranteed income, but there will be nowt for the kids.
This is unlike my PPP...perhaps/hopefully...

I do also know that both my father and step father's commercial sector pensions were far, far more generous than my mothers civil service payments.

That was a different generation - Gordon Brown put paid to private sector DB schemes.

 

[gjgm]

Furthermore, there is at present, no income tax payable on inherited pensions when the pension holder dies before the age of 75.

I think that might be something of
an oversimplification of the rules.
Gov.uk pages will clarify.

 

[S04]

Furthermore, there is at present, no income tax payable on inherited pensions when the pension holder dies before the age of 75.

I think that might be something of
an oversimplification of the rules.
Gov.uk pages will clarify.

I agree, it was an oversimplification. I should have been more precise.

 

[ashtead]

I’m hoping I won’t die before the age of 75 I think it’s a fair expectation tat on basis my widow survives allowing for modest inflation that with a DC pension fund it’s going to be taxable unless we give in to the temptation to buy a 40- 50ft mobo and burn along at say3000 rpm /28kn say to forieign parts which with the berthing insurance and servicing might help reduce the money purchase fund somewhat by the time I reach 75 or my widow goes on a spending spree and we don’t end up in a Signature type establishment.

 

[2Tizwoz]

Hmmmmm suspicious, We live abroad and its a regular occurrence for one of our friends to receive a request for proof that they're still alive. Do you think they're touting for business for their sister company "Funerals on a Budget"
Not beyond the realms of possibility though. My mother recently passed away and I've been busy dealing with the closure of accounts etc. I received the final water bill from a company of solicitors who were offering to facilitate its payment and offering me bereavement counselling along with help to prepare IHT and Probate documentation, at a price of course. I spoke with the water authority and they admitted it was the way they dealt with all bereavement final accounts now.
I paid direct to the water company and let them know what I thought of their money making scheme.

Which water company behaves like that?

 

[2Tizwoz]

Why do some people seem to think that tax is a problem?
When we pay tax we contribute to making the country a better place. We all benefit from taxes that other people pay, so it makes sense for each of us to embrace our own tax bills. Especially IHT on our estates, which we don’t even need to pay ourselves!

The government has now made IHT payable on businesses. The result is that to leave a business to family members its value must be kept below the threshold. That removes any incentive to make it grow.

 

[wonkywinch]

Never let the tax tail wag the investment dog.

 

[ylop]

I do also know that both my father and step father's commercial sector pensions were far, far more generous than my mother’s civil service payments.

are you comparing apples with apples? Salaries, years of service, retirement ages etc? It’s certainly possible that a blue chip private sector employer was more generous than the civil service - but it would be fairly unusual. Whilst it would be not uncommon for women who’s employement was mostly/all in the last century to end up with less pension than men for various reasons: lower wages, earlier retirement ages, lower career progression, time off to have / raise children etc.

The government has now made IHT payable on businesses. The result is that to leave a business to family members its value must be kept below the threshold. That removes any incentive to make it grow.

Anyone who is likely to fall foul of this can likely get advice to minimise the impact. Forward planning is important. There is still an incentive to make it grow - it’s just a reduced incentive and one which might have cash implications for the beneficiary.

 

[seeSimon]

are you comparing apples with apples? Salaries, years of service, retirement ages etc? It’s certainly possible that a blue chip private sector employer was more generous than the civil service - but it would be fairly unusual. Whilst it would be not uncommon for women who’s employement was mostly/all in the last century to end up with less pension than men for various reasons: lower wages, earlier retirement ages, lower career progression, time off to have / raise children etc.

Oh, silly me ....so pleased there are clever big boys out there to correct my stupidity. If only I was as smart as you. .

fwiw...Two old school "blue chip" management pensions (one a director), one Inland Revenue (you may have heard of HMRC?) "Classic", commonly referred to these days as "gold plated" ...so we're not generally particularly"hard of understanding "...but I'm just a Chartered Engineer, albeit a Fellow of my professional institution.

You? As I've said before, from my life experience, you do tend to come across as some sort of retired teacher/lecturer?

 

[chriss999]

The government has now made IHT payable on businesses. The result is that to leave a business to family members its value must be kept below the threshold. That removes any incentive to make it grow.

Does that really happen? Do business owners really say: ‘I’m fed up with IHT so I’ll keep the business small and remain poor?
Or do they carry on making money and look for ways to pass on value untaxed? Seems more likely to me.

(Ed: Sorry, I’ve just seen that ylop has made the point more eloquently already)

 

[ylop]

Oh, silly me ....so pleased there are clever big boys out there to correct my stupidity. If only I was as smart as you. .

fwiw...Two old school "blue chip" management pensions (one a director), one Inland Revenue (you may have heard of HMRC?) "Classic", commonly referred to these days as "gold plated" ...so we're not generally particularly"hard of understanding "...but I'm just a Chartered Engineer, albeit a Fellow of my professional institution.

Go on - if you are going to be arrogant about it give us the numbers... did your mother earn the same salary, work for the same number of years and retire at the same age?

You? As I've said before, from my life experience, you do tend to come across as some sort of retired teacher/lecturer?

Wrong on every count, which may suggest your life experience isn't as wide as you think.

 

[Humblebee]

I, like many others on here, get an old age pension. DWP wrote to me recently about this and as a result I wanted to phone them. I called the number given in the letter. It was the DWP but showed on my phone as "Funerals on a Budget". Do they know something I (or we) don't?

Same here, seems odd that it shows as Funerals on a Budget. Perhaps a faulty internal link on their website? Maybe they do have a guide to assistance with funeral costs?

 

[dunedin]

Same here, seems odd that it shows as Funerals on a Budget. Perhaps a faulty internal link on their website? Maybe they do have a guide to assistance with funeral costs?

What type of phone and what network does the OP use?

There is no issue at the DWP / Pensions end, you are just dialling a number.
But your phone and/or mobile network supplier tries to be helpful and associates a name with that number - using one of multiple business databases. BT/EE use Hiya for this - Business Name in Caller ID | Security Help | EE

So the issue is that Hiya (or equivalent) have linked the DWP number to the wrong business name.
This may differ on differnt phones or networks.

The issue is not at the DWP end

 

[Neeves]

What type of phone and what network does the OP use?

There is no issue at the DWP / Pensions end, you are just dialling a number.
But your phone and/or mobile network supplier tries to be helpful and associates a name with that number - using one of multiple business databases. BT/EE use Hiya for this - Business Name in Caller ID | Security Help | EE

So the issue is that Hiya (or equivalent) have linked the DWP number to the wrong business name.
This may differ on differnt phones or networks.

The issue is not at the DWP end

And don't simply complain here. If you don't advise the DWP they may not know. They do supply an email address - use it.


On a different issue.

I had to change my bank details but DWP will not accept email instructions (which makes me wonder what is the email address for). They will only accept change of address details etc by snail mail, courier - anything with hard copy. So when one phones you get into a queue that is so long my phone batteries ran out before I spoke to a person. Resorted to snail mail.

Jonathan

 

[bedouin]

And don't simply complain here. If you don't advise the DWP they may not know. They do supply an email address - use it.


On a different issue.

I had to change my bank details but DWP will not accept email instructions (which makes me wonder what is the email address for). They will only accept change of address details etc by snail mail, courier - anything with hard copy. So when one phones you get into a queue that is so long my phone batteries ran out before I spoke to a person. Resorted to snail mail.

Jonathan

I am glad that they won't accept bank details change by email - it is really not safe and there have been several frauds where people have spoofed emails purporting to change payment details.

 

[Neeves]

I am glad that they won't accept bank details change by email - it is really not safe and there have been several frauds where people have spoofed emails purporting to change payment details.

I understand the. security implications but sending a letter takes days and they do not acknowledge receipt (which could be done by email). The queue for the phone call needs to be addressed. The confirmation that the instructions had ben received was the payment to the new account.

Jonathan