Currently anyone who inherits a pension fund which is already being used to provide an income, has to pay 55% in tax. The only exceptions are spouses and children under 23. Instead, they are required to pay income tax on any income they draw from the fund – at either 20% or 40%. If a pension fund has not been used to provide an income, there is no tax payable.

From April 2015, anyone who inherits a pension fund will have to pay no tax – whether it is already being used or not. They will not be liable to income tax either. But there will still be a limit of £1.25m on the amount of money anyone can put into a pension in total.

Currently anyone who inherits an unused pension pot from someone older than 75 has to pay tax at 55%. Spouses however can inherit the pension (but no other beneficiaries) and pay income tax on the income they receive.

But from 2015, all beneficiaries will only have to pay income tax. Depending on the rate of tax they pay – their marginal rate – they will have to pass 20% or 40% to the taxman