Six of crucial pension questions of 2024 answered by STEVE WEBB

Our popular agony uncle Steve Webb has celebrated the publication of his 400th pension column for This is Money.

He marked the occasion with a ‘behind the scenes’ tour and offered some valuable tips on how to get your question answered.

The former Pensions Minister also revealed some of the lessons This is Money readers could teach his successors in the post he held for five years.

‘I think it should be compulsory for every Pensions Minister to read through my This is Money inbox every week to get a better understanding of the aspects of the pension system which confuse, anger and frustrate people,’ he says.

‘The messages I receive from readers give me a great insight into what is on the mind of the public.’

Anxiety about changes an incoming Government might make was a common theme during the election campaign in the summer and through the rest of the year.

Steve received many questions from people wanting his take on unfolding events, especially after the Budget announcement that pensions would become liable for inheritance tax from 2027.

We have selected some of his best columns of 2024 below. Meanwhile, if you have something you would like to ask Steve, scroll down to find out how to send in your own pension question.

This was top of mind for many people after the Budget, but Steve reassured readers that transfers of pensions and other assets to a surviving spouse will remain free of inheritance tax.

That exemption is going to stay, and the main thing changing from April 2027 is you will have to include certain pensions when working out the value of an estate for inheritance tax purposes, he explained.

‘This primarily includes what the Government calls “unspent” balances in defined contribution pensions, as well as certain lump sum death benefits in either defined benefit or defined contribution pensions.’

Steve expressed concern that in terms of the practicalities, the new system will be much more involved for grieving families.

Between now and spring 2027, the Government will have to work out the details of how the new process will be administered, and this is likely to be a topic of future columns.

Steve went on a detective hunt spanning multiple pension providers, administrators and even continents to find a reader’s fund worth thousands of pounds that was accumulated in the mid-1980s.

The trail went completely cold at one point. But over two separate columns, he shared the ups and downs of his ultimately successful mission in order to show people how to track down their own missing pensions.

Steve also wrote a longer free guide to finding lost pensions published by LCP, where he is a partner.

Anyone on tax credits – whether Working Tax Credit or Universal Credit – should have payments into pensions knocked off their income when their benefit is worked out, says Steve.

Since publication of this column, and a subsequent story about thousands of people potentially being underpaid Universal Credit, we have heard from a stream of readers who are not having benefits calculated correctly.

‘If you have been told that no account can be taken of your personal pension contributions this is incorrect and you should appeal against this decision,’ says Steve, who is continuing to investigate.

Steve reckons state pension deductions due to past periods of ‘contracting out’ from some National Insurance payments is the most frequent topic of questions to his inbox.

You are meant to get a private pension instead, as he explains in this column. Later in the year, he also looked at the mysterious ‘COPE’ figure, which used to appear on state pension forecasts to explain these state pension deductions.

‘This figure was meant to be a signal to people that something had been knocked off their state pension because of past contracting out but they should be getting a similar figure instead from a workplace pension.’

However, the COPE figure just caused further confusion, and has been scrapped from forecasts. It is unmourned by Steve, who says: ‘I, for one, am pleased to see the quiet death of the COPE.’

The ‘normal minimum pension age’ for private retirement funds is going to rise from 55 to 57 overnight on 6 April 2028.

A reader asked Steve what the rule change would mean for people like him who were born in a certain two-year window in the 1970s.

‘Anyone born between 6th April 1971 and 5th April 1973 will find that they have a period when they can access their pension at 55, but this will then be switched off for a period of up to two years until they reach the age of 57,’ says Steve.

He suggests people planning to draw on a private pension and who might be affected check the rules of their scheme on this issue, which is going to become much bigger news in the next few years.

After a story about widows and widowers potentially missing out on inherited state pension, we received a deluge of messages from readers.

Steve was concerned to hear that many had been given incorrect information on the phone by Department for Work and Pensions staff.

He therefore devoted a column to ‘mythbusting’, to debunk a few of the things bereaved people were being told about what state pension they might inherit.