Inheritance Tax and Your Pension
The 2024 Autumn Budget introduced significant changes to how pension death benefits will be taxed. Under the new rules, most unused pension death benefits will now form part of your estate for inheritance tax (IHT) calculations. This means up to 40% of your pension could be lost to inheritance tax.
These changes are due to take effect from 6 April 2027.
With this shift, many retirees may need to reassess their Inheritance Tax strategies and make informed decisions about their pension plans. Expert inheritance tax advice can provide you with the clarity and options you need. Your adviser will guide you through the available choices, helping you plan ahead with confidence.
What is changing in April 2027?
Under current rules, most pensions are not included in your estate when calculating inheritance tax — which makes them one of the most tax-efficient ways to pass on wealth.
However, the government has confirmed that from 6 April 2027:
- Unused pension pots (those not yet accessed) may count toward your taxable estate.
- This could result in 40% tax on anything above the £325,000 inheritance tax threshold.
- Even pensions left to children or grandchildren may be affected.
What does this mean for me?
- If you have a property, savings and pensions you could easily exceed the threshold and leave your family with a large, avoidable tax bill.
- Now is the perfect time to review how you're incorporating pensions into your retirement and estate planning.
- Connect with a local adviser to explore your pension withdrawal strategy, help you navigate the changes and explain all your pension income options.
How we can help
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We only work with Financial Conduct Authority (FCA) regulated financial advisers and firms in the UK to help you get support, wherever you’re based.
Tell us what you need
We connect you with FCA-regulated financial advisers who specialise in pensions, estate planning, and inheritance tax to help you navigate the 2027 changes.
Tell us who you are
Simply provide your name, email address, and telephone number so that your adviser can get in touch and begin to help you. This usually happens within 24 hours.
Get advice to protect your wealth
The rules are changing but you still have time to plan. Speak to a local adviser today and explore ways to protect your pension and pass on more to your loved ones by reviewing:
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Understand how the 2027 changes affect you
Get FCA-Regulated advice on how the new changes will impact you and your family. -
Review your total estate (property, pensions, investments)
To build a plan for your retirement based on your total estate and how much you need for your retirement. -
Explain all your pension income options (drawdown, annuity, lump sum)
To build flexible drawdown strategies to manage access and inheritance. -
Create a personalised strategy to protect your family’s future
Your adviser will work with you to create a full estate and pension plan that aligns with your legacy goals.
Speak to a local adviser today and explore ways to protect your pension and pass on more to your loved ones.
Why choose Local Financial Advice?
We carry out regular checks and reviews on the advisers we work with to ensure we connect you with an FCA-regulated expert. When you use our service to connect to an adviser in your area, you will receive:
- A free, no-obligation initial consultation
Discuss your goals with your adviser. - The option of impartial, personally tailored advice
All advisers are carefully selected, FCA-regulated experts. - The opportunity to match with a different adviser
If you're not completely happy with the service you receive from your adviser, we'll happily find you an alternative.
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