The Government is facing growing pressure to rethink its plans to bring pensions into the scope of inheritance tax (IHT), with a number of industry organisations calling for "fundamental" changes to the plans.

Chancellor, Rachel Reeves, previously announced plans to remove the concession for pension pots to be passed on to anyone free of IHT as part of her inaugural Budget last year, launching a consultation on the plans shortly after this.

However, industry experts have already identified a number of problems that could be caused by the proposals, urging the Government to consider "less costly, quicker, and ultimately more effective" alternatives.

These calls have continued to grow as more industry organisations share their responses to the Government consultation, with the Association of Professional Pension Trustees (APPT) the latest to join the chorus of organisations calling for changes to the plans.

In particular, the APPT called for the provisions to be as streamlined as possible and to operate to timescales that are both "realistic and sympathetic" to those affected.

“Our principal concern – shared by many other respondents – is that the proposals place a very significant burden on not only pension scheme administrators (PSAs) generally and on third-party administrators (TPAs) in particular at a time when there is already a huge resource and capacity stress on the sector due to other ongoing Government-led reforms," chair at APPT, Rachel Croft, said.

"The impact will be felt most harshly by smaller schemes and smaller employer sponsors, adding further costs and anti-growth administrative obligations upon them.

“We further believe that some of the obligations it is proposed to place on PSAs are unreasonable and not appropriate.

"Our final comment is that however this policy is implemented, the process for PSAs, TPAs and beneficiaries should in the end be as streamlined as possible and operate to timescales that are both realistic and sympathetic to those affected.”

While the Investing and Saving Alliance (TISA) said it was supportive of the policy intent of introducing a policy which reduces these benefits and incentivises pensions being used for their originally designated purpose, it warned that the current uncertainty around the plans could have unintended consequences for savers.

"The uncertainty of whether current or increased pension saving levels might lead to an IHT charge in the future may result in individuals reducing or delaying planned contribution increases, to ensure they remain well below the threshold," head of retirement at TISA, Renny Biggins, cautioned.

"This would clearly be a very poor outcome and creates a direct conflict between these proposals and wider Government objectives to boost personal saving and financial resilience in later life."

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