The current 55% tax duty, payable when pension funds are passed on after death, is set to be axed under a Conservative government, the Chancellor of the Exchequer George Osborne has announced.

The measure was unveiled by Mr Osborne at the Conservative Party conference in Birmingham on Monday.

It was originally due to be announced at the Autumn Statement on December 3.

From April 2015, if a pension saver dies aged over 75, beneficiaries will receive the funds free of tax if they keep them in a pension. If they draw the pension, they will pay their marginal rate of tax.

If the person who dies is under the age of 75 then there will be no tax.