George Osborne announced what looked like significant improvements to pension legislation for April 2015 at the Conservative Conference earlier this week.

The radical changes would mean that you can inherit pension funds from your parents. This could lead to generations benefiting from using a parent’s pension fund.

In addition, the 55% death benefit tax rate on pensions is to be abolished.

If the detail confirms what George Osborne outlined, this makes pensions look very attractive when coupled with the new income flexibility also scheduled for April 2015.

As always, the devil is in the detail and we eagerly await confirmation and the exact detail on how these changes will work in practice.

Yesterday (1st October 2014) saw the new legislation on intestacy being enacted. The key points are as follows:

When someone who has no children dies intestate, their whole estate will pass to their spouse. Before today’s changes a complex set of rules has been used which also, in some circumstances, allocated parts of the estate to other family members.

When someone dies intestate and they do have children, the way their estate is split between their spouse and children will be simplified. This has also previously been subject to a complex set of rules.

Closing a loophole to make sure children who are adopted don’t lose their inheritance after their parent’s death.

From a holistic planning point of view I think that you should still take legal advice on this issue and for the majority of people a will is essential.

Whilst considering the impact of the new pension rules and your estate planning, independent financial advice on your existing life cover and pensions, including any employee benefits, should ensure that you have everything in order.

 

Steve Speed 02/10/2014