Reduce Inheritance Tax on My Pension
Understand the 2027 Rule Changes
From April 2027, unused pension funds may be included in your estate for Inheritance Tax (IHT) purposes.
This could significantly affect:
- Married couples with total assets (including pensions) above £1 million
- Individuals with total assets (including pensions) above £500,000
Inheritance Tax can be charged at up to 40% on the excess above allowances.
“Without planning, more of your wealth could go in tax rather than to your family.”
What Could This Mean in Practice?
Before April 2027
- House: £600,000
- Investments: £300,000
- Other assets: £50,000
- Pension: £600,000 (excluded)
- Estate value for IHT: £950,000
- IHT liability: £0
After April 2027
- Pension included in estate
- Estate value: now £1,550,000
- Potential IHT liability: £220,000
How we can Help
A Financial Adviser can:
- Assess your potential exposure
- Explore mitigation strategies
- Align pension planning with estate planning