New research has showed that some of Britain’s over 50s are holding back on withdrawals to pass on their pension tax-efficiently, but many are missing out.
The latest figures show one in four over 50s with a private, defined contribution scheme and flexible drawdown, are planning to leave aroudn 45 per cent of their pension behind – equating to roughly £51,000 per pension in the UK.
Under the new pension freedoms act, introduced in 2015, any savings left through pension schemes can be now passed down ‘tax-efficiently’.
The new rules state that heirs can inherit pensions tax-free if the benefactor dies before the age of 75.
They are only taxed at their personal income tax rate if the benefactor dies after the age of 75.
Despite the results, many of the people surveyed were still unsure of the rules surrounding Inheritance Tax.
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