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“Netwealth has seen a fourfold increase in the number of investors taking the tax-free cash from their pensions this year, with the average amount withdrawn a hefty £190,000. Many have used the company’s network model to transfer the cash into the names of adult children in their 20s and 30s.”
Gerard Lyons, chief economic strategist at Netwealth, says that while he still expects the BoE to cut interest rates, an impact of the increased spending announced in the Budget could mean inflation stays slightly higher for longer, limiting the ability of the BoE to cut interest rates.
“For example, Netwealth offered a free tax-harvesting service to lock in gains ahead of the Budget. The 25 per cent of clients who used this hopefully now feel justified at the news of a CGT rise from 20 per cent to 24 per cent at the top rate.”
Charlotte Ransom, chief executive of Netwealth, suggests the Government might cap the pension assets that can sit outside an estate on death. Alternatively, they could only allow tax-free passage to a spouse, as with other investments.
'The inheritance tax treatment of defined contribution pensions is currently very generous,' says Charlotte Ransom, chief executive of Netwealth.
“It’s a good move to evaluate your situation now, as it gives you plenty of time to adjust your approach if needs be.”
Charlotte Ransom, CEO of financial advisors Netwealth said: "We've seen a significant increase in people bringing forward discussions and exploring tax-efficient ways to pass on their money."
“Gerard Lyons, the chief economic strategist at Netwealth, said: “The Chancellor is too pessimistic. She was justified in highlighting the poor fiscal position we are in and the high level of debt, but she was wrong to talk down the economy because, as the figures show, the economy was relatively strong in the first half of the year.”
