City Regions: Pension Funds

Lord McFall of Alcluith Excerpts

Tuesday 23rd February 2016 Lords Chamber

[Baroness Williams of Trafford]

My noble friend is absolutely right.

[Lord McFall of Alcluith (Lab)]

My Lords, the big legal changes to pension death benefits which were introduced by the Chancellor and took place last April have had a perverse effect, in that it is much more tax efficient if someone dies under the age of 75 than just over the age of 75. The amount is tax-free if someone is under 75, but half the pension savings are lost if they are over 75. That is the result of rushed and thoughtless action by the Chancellor. Therefore, can we have an assurance that before he abolishes the tax-free lump sum, as mentioned in this week’s Sunday Times, he will think slowly rather than fast and recklessly?

[Baroness Williams of Trafford]

My Lords, this Question is about local government pension funds and I cannot comment on a policy that has not been announced. However, I concur that if my husband died before reaching pension age, I would be a lot better off.