Overview

• From April 2027, personal representatives will replace pension providers in calculating and paying inheritance tax on unused private pension savings.
• Death-in-service benefits and dependants’ pensions under defined benefit schemes have been exempted from the new tax rules.
• Pensions inherited from individuals who die after age 75 will incur both inheritance tax and income tax on withdrawals, potentially reaching a combined 64% rate.
• Experts warn the reforms could cause lengthy probate delays, extra administrative costs and emotional strain for grieving families.
• Consumers and advisers are already accelerating pension withdrawals and revising planning strategies ahead of the rules, while HM Treasury forecasts over £1 billion in annual revenue by 2030.