Old Mutual Wealth Retirement Planning Expert Adrian Walker says:
“Today’s Autumn Statement is fantastic news for those that have saved into an Isa during their lifetime. However, the Government should consider permitting true inter-generational sharing of Isa savings. Today’s proposals mean that Isa savings can in future be transferred to a spouse , or civil partner within a tax-advantaged Isa wrapper*. However, this is at odds with the abolition of the death tax on pensions**, which will allow pension savings to be passed on to a wider range of beneficiaries and for the inherited pension to be passed on through multiple generations potentially free of tax.”
“We know that a third of retirees*** use some Isa savings to fund their retirement so today’s news is a welcome boost for those looking to save for later life.”
*Autumn Statement 2014 pg. 8. Isa assets are currently treated as a general investment account when passed on at death, meaning any income taken is taxable. Today’s proposals mean a spouse will be able to take income from the inherited assets tax free.
**Following the abolition of the 55% death tax on pensions, assets within a pension wrapper can be passed on free of tax if the individual dies before age 75 or at the beneficiaries’ marginal rate thereafter. The Government has confirmed the same rules will apply if the pension pot is subsequently passed through multiple generations based on the age of the beneficiary at their death.
*** Old Mutual Wealth Retirement Income Uncovered