Rachel Reeves, the Chancellor, has been accused of stealing a pensioner’s happy retirement in a scathing letter. The letter, written by a 69-year-old retired scientist from Leicester, details how the Budget changes to inheritance tax on pension pots have shattered their plans for a comfortable retirement. The pensioner, who was born and raised on a council estate, studied hard and became the first in their family to attend university.
They had a successful career in science and retired at 60, feeling content that they had planned and saved wisely for a retirement their parents never had. However, the Budget changes mean that their inheritance tax bill has skyrocketed from £200,000 to £640,000, which the pensioner describes as “gut-wrenchingly unjust.” Additionally, their children could face paying £360,000 in income tax on the balance they inherit. The letter also highlights a “sinister” threat hidden in the Chancellor’s personal pension funds raid.
Pensioner protests inheritance tax hike
If the pensioner dies before April 2027, their pension would be worth £800,000 more as the changes would not apply. If they die before April 2030, they would pay £440,000 in inheritance tax but leave a pension pot worth £360,000 more because their children would not have to pay income tax on it.
However, if they die after 75, 40% would be lost in inheritance tax, and 55% in income tax when the balance is drawn down. The pensioner argues that the state has already taken its pound of flesh after a lifetime of paying taxes. They feel that the Budget effectively punishes people for working hard and saving diligently for retirement so that the state does not have to support them.
The letter concludes by stating that the pensioner will emigrate, take their pension with them, and try to avoid inheritance tax altogether. They will spend their money abroad and protect their pension and estate from the Chancellor’s raid on hardworking people’s lifetime savings, leaving a legacy to their family instead.
