The Chancellor has older people in his sights in his desperation to find more money, writes Jonathan Walker
Chancellor John Healey (Image: Getty)
Chancellor John Healey is to launch a stealth increase in inheritance tax next year. It will eventually raise £1.46 billion for the Treasury – every year – at the expense of grieving families. of course, it comes on top of existing inheritance tax obligations. And personal finance experts warn that older people are already panicking at the thought of even more of their savings going to the Government instead of loved-ones.
The windfall for the Treasury will come from charging inheritance tax on unused pension pots. Many people save into a pension while they are working, often with contributions from an employer too, and use the money once they retire. But they may die before they spend it all. In fact, a lot of retirees plan their spending carefully, to ensure the cash does not run out while they are still alive.
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In the past, unused pension pots could usually be passed on to a loved one without being liable for inheritance tax.
It might still be taxed in other ways. For example, in some cases a beneficiary who inherits a pension pot might be charged income tax when they withdraw money from it.
But Labour have now decided pension pots will be liable for inheritance tax too.
The new rule comes into force in April 2027. And the Treasury says it will raise £640 million, increasing to £1.46 billion a year by 2029-30.
That’s more money from the Government, taken directly from the beneficiaries of the deceased – such as children whose parents have died.
Former Chancellor Rachel Reeves announced the policy, and the current Chancellor, John Healey, is sticking with it.
Predictably, older people who know about the change are already worried, although there are probably many others who don’t even know about it.
A report by financial advisers Quilter found retirees are stepping up the amount they hand over in gifts, in an attempt to reduce the amount they leave in their wills, even though six in ten are worried about running out of money to fund themselves.
The average retiree now gives £2,272 a year to relatives and spends a further £2,250 on education costs for children and grandchildren. Together, this amounts to £4,522 a year.
This report shows that the planned inclusion of unused pension pots for inheritance tax has changed how people use their money. More than a quarter (29%) plan to spend more of their pension savings during their lifetime, 26% intend to gift more of their pension wealth, and 24% expect to access their pension earlier than originally planned.
Steven Levin, CEO of Quilter, said retirees are helping their families more, but added: “Many people are making these decisions against a backdrop of economic uncertainty and significant changes to the retirement landscape, leaving many concerned about their own financial future.”
It’s another example of Labour’s desperation to raise cash to pay for their spending plans, and willingness to use older people as a source of income.
Earl Spencer savaged in brutal BBC interview over Diana claims – ‘Where’s the proof?’.TA
Princess Diana’s brother fiercely defended his upcoming book in his first TV interview.
Earl Spencer insists he’s ‘telling the truth’ about Charles claims
Earl Spencer has delivered a scathing blow in his first TV interview since excerpts of his new book about the death of his sister, Princess Diana, were released. In the upcoming book, titled Swan Song: Diana, My Sister, King Charles III is accused of telling Spencer days after the late Princess of Wales’ death that “we’ll forget her soon enough”, according to quotes from the Daily Mail. On Friday (September 18), the author sat down with Laura Kuenssberg for his first TV interview, in which he insisted he is “telling the truth” about the explosive claims.
He told the broadcaster: “I can tell you here and now those are exactly the words he said. I’ve only ever had two calls on the line with Prince Charles at any stage of my life. I was hyper alert to what he was saying, and those are precisely the words that he said, and I promise that to you now. Genuinely, that is what he said. I don’t hear him saying he didn’t say that.”
Earl Spencer sat down with Laura Kuenssberg for his first TV interview ahead of his upcoming book (Image: BBC)
“He went ballistic, would be the right term. He started really going for my family as a whole in terms of their sense of duty not being adequate enough, and ranted for a while, I have no idea how long, but it was a significant period, and I just listened.
“And then he stopped, and I thought, ‘Ah, now he’s going to pull himself together and say something more appropriate’. And then he said, ‘We’ll forget about her soon enough’.” When he was asked about the “unprecedented” statement from the palace, Charles said: “Well, is he furious?
“Is he furious or is he embarrassed? They’ve sort of smudged that one, haven’t they? They’ve said that recollections may vary.” When Laura pressed him on whether he had the evidence to support his allegations, he added that he had told his family and friends at the time what had been said “because it was so monstrous”.
The bombshell tell-all book is set to hit shelves next week and will reopen the events leading up to and following Diana’s untimely death, written from the perspective of her own Spencer family. Shortly after the excerpt made headlines, a spokesperson from Buckingham Palace issued a strong rebuttal to the claims.
Diana’s brother says Charles ‘went ballistic’ in phone call after her death (Image: BBC)
It read: “While we do not comment on books as a matter of principle, His Majesty is mindful that the pain of fraternal grief can cloud reason, affect judgement and colour memory in ways others do not recognise, even many years after such a loss.” The King, Prince William and Princess Catherine did not make any remarks on the allegations as they carried out royal engagements on Thursday afternoon (September 17).
The Duke of Sussex has also not spoken out about his uncle’s book, and its reflections on his parents’ relationship, when he was asked by reporters while attending the inaugural Invictus Spirit Awards in London. Shortly after the interview aired, viewers flocked to social media to share their thoughts online, with one user penning: “Why has the BBC even given Earl Spencer the time of day?
“This book is going to be a best-seller. Money, money, money. Let’s hope all the money made from the book goes to charity.” Another argued: “He’s fighting for his relevance. Silly man,” as a third agreed: “Left it a bit late to come out with this. Does Althorp House need a new roof or something?”
Another chimed in with: “Here we go. His five minutes of being in the spotlight. Making a few bob out of his dead sister. Not a nice man, me thinks.” A fifth quipped: “Someone is desperately trying to plug a book…”