Changes to Inheritance Tax and Pensions from April 2027

From April 2027, a significant change is coming to how pensions are treated for inheritance tax - and it could have a major impact on how much your family ultimately receives. For many years, pensions have been one of the most tax-efficient ways to pass on wealth.

However, that position is now changing.

Before considering any planning strategies, it’s important to know what you’re entitled to. Speaking to a Chartered financial professional like ourselves can help you understand your options clearly and make informed decisions.

Speak to a Chartered adviser

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What’s Changing?

At present, most pensions sit outside your estate for inheritance tax (IHT) purposes.

From April 2027, unused pension savings may be included within your estate. This means they could be taxed at up to 40% if your total estate exceeds the £325,000 threshold (alongside any available allowances).

In simple terms, money you haven’t yet drawn from your pension could now increase your inheritance tax liability.

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Changes to Inheritance Tax: What This Means for You

This change brings pensions into much closer alignment with the rest of your estate. As a result:

• Pension values could push you over the IHT threshold

• Strategies that once reduced tax may no longer work as intended

• Decisions around when and how to access your pension become far more important

While transfers to a spouse or civil partner remain exempt, passing wealth to other beneficiaries is where the impact will be felt most.

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Acting Early Is Crucial

If you wait until these changes take effect, your options may be limited. Acting early gives you the opportunity to review your position, adjust your strategy, and structure your finances more efficiently.

Without this, you risk leaving a larger-than-necessary tax bill behind.

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Why Advice Matters More Than Ever

These changes make pension planning and inheritance tax planning far more interconnected. Questions like:

• Should you start drawing from your pension sooner?

• How does your pension now fit within your wider estate?

• What can you do now to reduce future tax?

…all require careful, personalised analysis.

We help you navigate these changes to inheritance tax with clarity by reviewing your full financial position, modelling the impact of the new rules, and putting a plan in place that evolves over time.

The goal is simple: to help you preserve as much of your wealth as possible for the people who matter most.

With pensions becoming part of the inheritance tax equation, getting the right advice is essential. Speak to us today to stay ahead of the changes.

Speak to a Chartered adviser