AJ Bell boss tells chancellor that ‘complex and costly’ Budget proposal will ‘undermine’ retirement savings system
Rachel Reeves’ plan to levy inheritance tax on pensions will “undermine” the retirement savings system and risk leaving beneficiaries with higher costs and lengthy delays before receiving their money, UK wealth managers have warned. In a letter seen by the Financial Times, Michael Summersgill, chief executive of investment site AJ Bell, told the chancellor that the Budget proposal was “arguably the most complex and costly way of raising tax from unused pensions on death”.
The government’s proposals would require pension providers to use a “personal representative” of the deceased pension owner to calculate how much of their pot could be exempt under the nil-rate band — the amount of an estate that is free from inheritance tax. But this extra administration would raise costs, Summersgill warned, adding that completing the process in six months — the time limit for paying inheritance tax — would “not just be difficult” but “in many cases . . . prove impossible”.
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