In such a case the pension would very much be needed to provide a secure ongoing income and so is it fair to have IHT levied on it?
The report highlights the hugely complex world of pension tax and the importance of a wholesale look at how it is approached.
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For years we have seen a series of iterative changes – tweaks to lifetime and annual allowances for instance and these have caused confusion and complexity.
Any further tweaks to the system without considering the whole only increases the risk of further unintended consequences.
It is time for the issue of pension taxation to be reviewed wholesale rather than piece by piece.
Helen Morrissey is head of retirement analysis at Hargreaves Lansdown
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