For years, pensions have been one of the UK's most tax-efficient ways to build wealth and pass it to the next generation. That advantage is set to change.
From April 2027, unused pension pots will generally be brought into the inheritance tax system. For some families, this could create a combination of inheritance tax and income tax on pension wealth passed to beneficiaries. In the most severe example calculated by NFU Mutual, a family could lose the equivalent of 91 per cent of a £700,000 pension pot to tax. The changes could have significant implications for people who have planned to leave their pension savings to their families.
