Pension pot tax hit could push elderly towards assisted suicide

Vulnerable people worried about providing for their loved ones may seek to end their lives early, a pensions expert has warned.

The fact that deaths before the age of 75 are “treated more generously tax-wise” than those on or over the same age could be a “consideration” in someone asking for assisted suicide under Kim Leadbeater’s bill, industry commentator Andrew Tully said.

Last Friday, MPs voted by 330 to 275 in favour of the Terminally Ill Adults (End of Life) Bill. It would allow those in England and Wales deemed to be terminally ill, and with less than six months to live, to receive help to kill themselves.

‘Cliff-edge situation’

Tully explained: “This is a cliff-edge situation and a few days either way could have a significant financial impact. In some cases, it can be hundreds of thousands of pounds.

“When someone is terminally ill, consideration of tax and what money is passed on already adds extra stress, especially where complex family dynamics are involved.

“They’re at the end of their life, but at the same time are worried about providing for those they’ll leave behind.

“There’s not much planning you can really do at the moment, other than setting out who you want to receive benefits, because you either die after 75 or you don’t, but this could now become yet another consideration.”

Unknowns

According to The Daily Telegraph, in the event of someone dying at 75 years-of-age, a £500,000 pension pot could land someone a £225,000 tax bill if they opted to take their inheritance as a lump sum.

But, under current rules, if someone dies before age 75, their pension can be inherited free of tax.

Standard Life advisor Mike Ambery said: “We are yet to fully understand how the assisted dying legislation will work in practice, however, it is clearly vital that we create a system whereby wider financial considerations should not influence an individual’s decision.

“In future, assisted dying will need to be a factor in the legal consideration of a multitude of financial circumstances, including lump sum death payments and estate planning.”

Unworkable

Legal experts, medical specialists and ethicists are all raising serious concerns about the implications and workability of the backbench MP’s proposals.

Former High Court judge Sir David Bodey highlighted the absence of the funded infrastructure required to enable the court to “meaningfully carry out its proposed inquisitorial function” in approving an application for assisted suicide.

Intensive care consultant Dr Roger Stedman warned: “Making myself or other members of my profession agents of assisted suicide would break the bond of trust”.

And the Scottish Council on Human Bioethics said the House of Commons’ decision “gives rise to very grave concerns for all the vulnerable people who may have felt under pressure to end their lives”.