Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether her Department has made an assessment of the potential impact of the proposed changes to Inheritance Tax on the number of pensioners who will increase the rate at which they draw down their pension funds.

Reforms to the inheritance tax treatment of pensions announced at the Autumn Budget 2024 will remove distortions resulting from changes that have been made to pensions tax policy over the last decade, which have led to pensions being openly used and marketed as a tax planning vehicle to transfer wealth, rather than as a way to fund retirement.

More than 90 per cent of estates each year will continue to pay no inheritance tax after these and other changes.

The Government continues to incentivise pension savings to help fund retirement and pensions continue to benefit from very significant tax benefits, with gross income tax and National Insurance contributions relief costing £83.9 billion in 2024-25.

The Government published its assessment of the measure at: https://www.gov.uk/government/publications/inheritance-tax-unused-pension-funds-and-death-benefits/inheritance-tax-unused-pension-funds-and-death-benefits