The date of death debate is fun, but really detracts from the far more serious issues of the proposed pension reform. Reform is good. However, it would be better to have a gradual planned set of reforms rather than one big hit.
Trying to change everything at once makes it impossible to judge which bit has the desired effect and which part is a giveaway too far. I like the idea of not having to buy an annuity, but 150 GAD and total withdrawal are not necessarily in everyone’s best interest.
I would prefer to see a reduction on the 55 per cent tax on death. Perhaps down to 40 per cent in line with IHT or maybe a little lower to encourage people to keep their money in their pension rather than add it to the total value of their estate.
Alternatively, should drawdown pensions be transferable to your children’s pensions to help fund future generations?
I have always found that the biggest objection to pension funding was that the funds would go to the annuity provider or the government. Most people would be happy to save for retirement in the knowledge that their next generation would benefit.
Anyway, back to the date of death debate, just as some people may decide to fund for retirement knowing they will live longer, those same people may well say, “My date of death is 83, so why do I need life cover and critical illness?” Car crash waiting to happen?
Pieter Burger
Chartered wealth manager and branch principal
Raymond James Investment Services
Honiton, Devon
