7 days


7 Days is a weekly round up of developments in pensions, normally published on Monday afternoons. We collate this information from key industry sources, such as the DWP, HMRC and TPR.

In this 7 Days

Chancellor delivers Autumn Budget 2024

The Chancellor, Rachel Reeves, delivered the Government’s Autumn Budget on 30 October 2024. Pensions changes are summarised in HMRC’s latest pension schemes newsletter 164 and focus on the inheritance tax treatment of “unused” pension pots from April 2027. Most authorised death benefits, including DB lump sum death benefits and DC benefits paid as income to a dependant through an annuity or drawdown, are in scope.

A technical consultation seeks views on the processes to report and pay any IHT due to HMRC, including ensuring relevant information is exchanged between HMRC, pension schemes, legal personal representatives and beneficiaries. The consultation closes on 22 January 2025. The Government intends to carry out a further consultation on draft legislation in 2025.

Minor changes to the tax regime for overseas pension schemes were also announced, including applying an overseas transfer charge of 25% on transfers to QROPS established in the EEA and Gibraltar made on or after 30 October 2024. The PTM has been updated to reflect these, and the Government has published Budget Resolutions to bring them into effect.

See our Alert for further details.

PPF responds to consultation on valuation assumptions for small schemes

On 29 October 2024, the PPF published its response to its consultation on changes to “section 143” valuation assumptions for smaller DB schemes. It is going ahead with its proposal of allowing actuaries to use bespoke discount rates in section 143 valuations for schemes with liabilities of less than £50 million.

The section 143 valuation is used by schemes to provide an estimated price for securing PPF benefits with bulk annuity providers. Using a standard discount rate was underestimating the buy-out price for smaller schemes, which was leading to marginally overfunded smaller schemes entering the buy-out market,  incurring administrative costs of running on, only to re-enter the PPF when no affordable buy-out quotes were received.

PSIG petition on tax treatment of pension and investment fraud victims

PSIG has launched a petition for HMRC to be given the power to waive or reduce charges and interest, such as unauthorised payment charges, payable by the victims of pension and investment scams in cases where losses were due to dishonesty or misconduct by a third party.