Institute for Fiscal Studies says the point of pensions is to fund retirement, not to bequeath large sums tax free

Jeremy Hunt’s budget decision to scrap the limit on pensions savings has been criticised as “bizarre” by the UK’s leading economics research institute, which says it creates an unjustified extra inheritance tax loophole for high earners that should be closed as soon as possible.

The Institute for Fiscal Studies (IFS) says that following last week’s budget many people on high incomes will now be able expand their pension pots in order to pass on hundreds of thousands of pounds more to their loved ones, tax free, when they die. The IFS says the purpose of pensions savings should be to fund retirement incomes not to escape tax.