Martin Lewis warns against gifting cash to ‘wife or kids’

Martin Lewis shared a loophole on how to hand over wealth to relatives like your wife and children The Money Saving Expert founder gave the advice on the latest installment of his BBC Sounds podcast, which aired on Monday (July 8).

During the episode, Martin spoke to Charlotte Jackson, head of guidance at the Money and Pensions Service, about how pensions can be used to “transmit wealth”, the BirminghamMail reports. She explained: “Pensions are a way of passing on wealth to dependents.

— So, your husband or children.

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Charlotte elaborated further: “What we’re seeing more now is that people are saving even in later years and not tapping into that pot because it comes with tax breaks and you can carry that forward. And that is a very big consideration.”

Wondering about the details, Martin asked: “What is the tax break? Inheritance tax?” Charlotte clarified: “You don’t pay any tax on it at all, so if you don’t access that pension pot and then you die, that pension pot is passed on to your spouse or your children. So if you’ve never reached your pension, it can be passed on inheritance tax free, capital gains tax free.” reports Birmingham Live.

She concluded: “As long as they didn’t touch it. If you can afford to save something, then what we’re seeing now is that more people are looking at that as a way to pass it on without inheritance tax. And a lot of people want to be able to do something for their families afterwards.”

The ‘Not The Martin Lewis’ podcast is where Martin asks your questions to the experts. The latest podcast summary on the BBC Sounds website explains: “How to cash out of retirement: avoid the tax trap, annuities, drawdowns, the 25% tax-free lump sum and more.”

Listeners can connect to new podcasts, return to recent episodes and explore popular series on platforms such as BBC Sounds and Spotify.