Pensions and Inheritance Tax. What’s changing in 2027?

For years, pensions have sat outside your estate for Inheritance Tax.

That has been a powerful planning advantage.

From April 2027, that position is expected to change.

Unused pension pots may be brought back into your estate for Inheritance Tax purposes. That shift could materially change how your wealth is assessed and, in some cases, how much tax is ultimately paid.

In this video, our CEO Chris Ball explains what is changing and what it could mean in practice.

What is changing?

From April 2027, unused pensions are expected to be included within your estate when calculating Inheritance Tax.

What was once outside the scope may now be counted.

Why this matters

This is not a small technical adjustment.

It changes the role pensions have played in long-term planning. Structures that once helped reduce exposure may no longer deliver the same outcome.

For some families, this could mean a tax liability where none previously existed.

The allowances to keep in mind

Current thresholds remain an important part of the picture:

• The Nil Rate Band sits at £325,000
• This can rise to £500,000 when passing a home to direct descendants

However, once an estate exceeds £2 million, the Residence Nil Rate Band begins to reduce. That reduction can increase the overall tax position.

The potential impact

Bringing pensions into the estate could push total wealth above key thresholds.

Crossing those lines matters. It can change how much of your estate is taxed and at what level.

The detail matters, but so does the timing.

What to consider now

This is the point to review, not react later.

• Look at your full financial position in one place, including property, pensions, and investments
• Understand whether you are close to the £2 million threshold
• Revisit existing strategies, especially those built around pensions sitting outside the estate

What worked before may not work in the same way going forward.

A clearer view leads to better decisions

If these changes raise questions, you are not alone.

Many people are now revisiting plans that have been in place for years.

You can watch the full video for a detailed explanation from Chris Ball.

Taking time to review now gives you options. It gives you clarity. Most importantly, it helps you stay in control as the rules evolve.