Looking up a generation, people are living longer and middle-aged retirees commonly now find their own parents are in need of specialist, and costly, long-term care.
People in their 50s and 60s could, conceivably, be facing a much higher financial burden than ever before for both their parents and children, and far beyond that which could be covered by state or registered pensions. So, sensibly, a long-term rainy day fund is created to cover these eventualities but if that rainy day never comes the safety net may not be required. Where that fund is a Qnups then at least it can eventually be passed on without a painful IHT hit.
Pension warning
There is a gentle health warning, though. Put simply, any Qnups must be real a pension arrangement.
Using the structure of a Qnups for short-term IHT planning alone is likely to fall foul of a number of anti-avoidance tests.
Pension saving does not, almost by definition, tend to start in old age, ill-health (or both) nor does it tend to swallow up the majority of an individual’s estate so, where characteristics such as these exist, be alert to the possible pitfalls.
Those seeking higher levels of retirement income need a different state-approved alternative and Qnups could well be it.
