Glad you found the blog useful, Liz, thanks! I’ve heard about the Vanguard SIPP and can’t wait.

Cheers,
Michael

I see in other posts that you’re a fan of Vanguard as well. Did you see that they’re opening their own SIPP in 2020?

https://www.vanguardinvestor.co.uk/investing-explained/investment-account-types#sippform

All the best,

Liz

Hi Andrew, you seem to have down your research on passing down wealth/inheritance tax. It’s an area I don’t know well therefore, not sure what the best strategy would be. Other readers have mentioned a Family Investment Company (FIC). This way you make the children shareholders. However, that depends on whether you have LTD profits to shield in the first place.

Hi David, I assumed the pension age increase from 55 to 57 was a fact but looks like I’m wrong. That’s very encouraging! Although we have no control over the pension age, the longer it takes for them to take action the better.

On a different note, a few people have emailed me about NHS pensions and teachers ones. It’s a shame that key professions like those have to work til they’re 68 to get their full pensions. People can still leave earlier (55+) at a reduced rate, but from what I’ve heard it’s not worth it. A 55 yo would take 45% less in total.

Thanks Michael,
I looked into passing my remaining pension pot on to my children if I die after 75 (Plan A) and it seems it’s still OK. Yes, they would have to pay their marginal rate income tax on it, but so would I if I was still alive. Their income tax rate would probably be lower than the 40% IHT hit, especially if they leave it invested until they retire.
My focus here is IHT avoidance and passing on a pension pot seems like it works. Yes, they won’t get another 25% tax free lump sum (as they will on their own lifetime pension savings) but getting a taxable income from my pension without IHT looks positive.
Let me know what you think.
Merry Xmas!
PS: Thanks for clarifying the other point about the extra 15 year window for extra early retirement.

https://www.moneywise.co.uk/news/2017-08-25%E2%80%8C%E2%80%8C/confusion-surrounds-age-which-savers-can-access-private-pensions

and more recent article repeating that still no bill proposed

https://www.financialreporter.co.uk/later-life/state-pension-age-rumours-spark-concerns-over-pension-freedoms.html

No the increase to 57 for SIPP is not confirmed and is what I was referring to. It’s currently 55 and will remain so until the government introduces a bill to increase it, which has not been done yet and is quite likely not to happen for a while, as it was I believe the coalition (tory/lib) governemnt that proposed it but we have gone thru 3 parliaments since then with no bill proposed.

For men and women, the state pension age is currently 65, increasing to 66 by October 2020. The state pension age is then scheduled to rise to 67 between 2026 and 2028. So yes, David, access to SIPP would be 57, not 58. But 57 is confirmed if I’m not mistaken.

What’s not confirmed is the increase from 67 to 68 for the state pension. The age at which you’re eligible for the state pension looks set to increase again to age 68 between 2037 and 2039, 7 years earlier than previously planned. You’re right this revised timetable hasn’t been confirmed but that’s just one year. Or am I missing something? For someone like me in my 30s, the pension age calculator shows state pension access of 68.

At this point introducing it for 2027 would probably lead to too short of a notice period, if the gorvernment introduces it at all.

Basically, you talk about this as if its in place, when it isn’t and there’s a good chance it may not be introduced at all.

Thank you GFF, glad you liked the article! For the purposes of this article, LISAs are just another after-tax wrapper similar to ISAs. They’re a great tool, though… Thanks for reminding me of that.