View Image

Some state poensioners could be taxed 87 per cent inheritance tax on their pensions from April 2027. The Labour Party government wants to bring an end to a tax loophole which was created by the pension freedoms of a decade ago.

Those freedoms meant people no longer had to buy an annuity with their pension savings, and so they could build up pension pots to pass on wealth to the next generation free of inheritance tax.

The very highest effective level of tax could affect those with estates worth £2 million to £2.7 million, including unused pension savings.

READ MORE Households in England waking up to letters about 'one-off' free £100 payment

That’s because above £2 million, you start losing the £175,000 IHT allowance that applies if you leave a property to your children or

See Full Page