The Chancellor delivered the Autumn Budget on 30 October 2024. We set out below the key issues relating to pensions.
Tax on pension death benefits
From 6 April 2027, most death benefits from registered pension plans will be part of the deceased member’s estate for inheritance tax purposes. This includes lump sums, which are currently not included as they are given to beneficiaries chosen by the trustees. The main exception will be pensions paid to dependants, for example a spouse or child. Pension schemes will be responsible for reporting and paying any inheritance tax owed. This plan is being reviewed, with a consultation open until 22 January 2025.
National Insurance contributions
From 6 April 2025, the rate of employer National Insurance will increase from 13.8% to 15%. In addition, employers will need to pay National Insurance on annual earnings over £5,000 (previously £9,100). There is no extension to include employer pension contributions.
Scheme administrators’ residency
From 6 April 2026, administrators of registered pension schemes (for tax purposes) will be required to be residents of the UK. In most cases, the scheme administrator for these purposes is the trustee board.
Overseas pension transfers
Transfers to recognised overseas pension schemes in the European Economic Area or Gibraltar will no longer be excluded from the overseas transfer charge.
Mineworkers Pension Scheme
The investment reserve fund of the Mineworkers Pension scheme will be given to the Scheme’s trustees to provide additional pension benefits to its members. This will give a boost of 32% to the annual pensions of 112,000 former mineworkers. The fund, now worth £1.5 billion, was due to be returned to the government in 2029.
If you would like to discuss this, please get in touch with your usual HPW contact or contact us.