UK Government announces pension reforms for terminally ill

The UK Government has announced plans to simplify the process for individuals with terminal illnesses to access their private pension savings. A key component of the reform involves updating the definition of terminal illness for pension tax purposes. The current requirement for medical evidence stating a person is expected to live for less than one year will be replaced by a more flexible test: that death can reasonably be expected within 12 months.

The reforms also aim to align pension rules more closely with the wider benefits system to reduce existing discrepancies. Pensions Minister Torsten Bell stated that the changes are intended to remove red tape, allowing people to access their own money more easily during difficult times.

Dr. Sam Royston of Marie Curie welcomed the move, noting that terminal diagnoses often cause sudden financial strain due to dropping incomes and rising costs. The government noted that nearly 90% of eligible employees are currently saving into workplace pensions due to automatic enrolment.