There is ongoing confusion among industry professionals around the government's plans to bring pensions into the scope of inheritance tax (IHT), research from Sackers has found.
Its survey showed that just 4 per cent of respondents felt clear about the scope of the proposals to apply IHT to certain wealth passed through pension schemes.
Of the remaining 96 per cent, most respondents had concerns “to some extent” as to what the ‘life products’ exclusion will capture, as well as which benefits fall within scope.
“Lack of clarity around the precise extent of the IHT proposals is clearly causing ongoing concern,” Sackers partner, Helen Ball, stated.
"Realistically, it may be some time before a clearer picture emerges, as the government takes time to digest the consultation responses.
"With potential administrative complexity adding to the unease, all eyes will be on the process which the government ultimately lands on for accounting for and paying any IHT due on pensions benefits."
Additionally, nearly a third (31 per cent) were unclear about the government's defined contribution (DC) priorities.
The research showed that there were mixed views about the government's 2025 pension priorities, with 62 per cent of respondents stating that while the government's defined contribution (DC) priorities are "clear", there is a lot happening all at once.
"With so much still to be decided and so many developments on the DC horizon, trustees and employers should monitor legal developments closely over the next few months, and check they have the resources to manage what may be coming down the track," Ball continued.
There was some evidence that the government priorities may differ from those of the industry, as Sackers found that 32 per cent of respondents are hoping for improved retirement support and 32 per cent want to see an increase in auto-enrolment contributions.
However, Ball noted that whilst we may see retirement support duties arrive via the Pension Schemes Bill later this year, there remains "considerable uncertainty" about the timetable for auto-enrolment changes.
"The two biggest concerns relate to increased administrative complexity, with the changes affecting day-to-day operations and increasing the risk of errors (cited by 36 per cent of respondents) and potential delays in paying out death benefits (mentioned by around 20 per cent)," Ball explained.
"There will therefore be lots of interest in the output of the government’s recent consultation process."
This article originally appeared in our sister publication Pensions Age.
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