Daily Briefing: Pension Opt-Out Deadline Days Away As Inheritance Tax Rule Costs Families Record Sums

A pension deadline with days left on the clock, an inheritance tax rule that’s already cost families a record amount, and news of another likely state pension rise, here’s what’s changing in money right now, and what it means for you.

Winter Fuel Payment opt-out deadline looms

If you’re a pensioner, mark this date in your diary: the deadline to opt out of this year’s Winter Fuel Payment is the 20th of September just days away.

If you don’t opt out and your income is under £35,000, you’ll receive between £100 and £300 automatically, with letters landing in October or November and payments following soon after. If your income is above that threshold, HMRC will claw the payment back through your tax code. Either way, it’s worth deciding now rather than sorting it out later.

The seven-year rule catching out families gifting money

Next, a warning for anyone planning to gift money to family. Gifts are only fully tax-free if you live for seven years after making them. Die within three years and the gift is taxed at the full 40% above your threshold; die between three and seven years and a sliding scale applies.

According to This is Money, families paid a record amount in tax last year on gifts caught by this rule. Anyone gifting anything significant should get it written down and dated.

State pension set for another rise (but the triple lock debate rumbles on)

Finally, the big one. The state pension is on track for another rise, this time worth around £515 a year from next April, if current wage growth holds. That would take the full new state pension from £241.30 a week to around £251.20. This pushes it above £13,000 a year for the first time.

But behind the scenes, a real debate is under way over whether the triple lock, which guarantees the pension rises by whichever is highest out of inflation, wages, or 2.5%, is affordable in the long term. So pensioners can expect a likely pay rise, alongside an ongoing fight over whether the mechanism that delivers it will survive.

This is educational content, not financial advice. Speak to a regulated adviser about your own situation.

Which one affects you most – the pension deadline, the state pension rise, or the gifting rule?

___________________________________________________________________________________________________________________________

Sources: Which?, This is Money, Guardian Money, Daily Express Finance