Mar 3, 2021

Budget 2021: Covid deaths set to cut state pension costs

The government will also receive an extra £0.9bn from inheritance tax, partly due to Covid-related deaths. More than 144,000 deaths involving Covid-19 have occurred in the UK since the start of the pandemic, figures published by the UK's statistics agencies show. The majority of coronavirus deaths have been among people aged over 65, many of whom will have been receiving the state pension. "With virus-related deaths rising sharply again in recent months, we have revised up the number of excess pensioner-age deaths in 2020-21 from 90,000 in our November forecast to around 100,000 in this one," the OBR said in its Economic And Fiscal Outlook, which is published alongside the Budget. The rise in inheritance tax receipts is partly due to the freeze of inheritance tax thresholds until April 2026 announced in the Budget and the growth in the value of estates, but higher Covid-19 deaths will also contribute, the OBR said.

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