We do our best to discourage one-off, taxable withdrawals from pensions. If you have to pay tax, it’s much cheaper to borrow even at credit card rates of interest. Those that have no choice or are in theory are non-taxpayers, are always very irritated that the pension company has to pay 30% to HMRC whatever happens; and they then have to go through the hassle of reclaiming it. A very inefficient accounting trick to boost short-term tax receipts? Surely not.
“HMRC scraps plans to tax pensions after death”
A couple of other Statement Highlights (in my world, anyway). A welcome ‘nothing happened’ on the treatment of pensions on death. They were never going to be liable to IHT (too complicated with trusts and trust law) but there was talk of making them income-taxable on the recipients at whatever age you die.