Pensions have long been considered one of the most tax-efficient ways to pass wealth to the next generation. For many individuals and families, they have sat slightly outside of the estate for inheritance tax purposes, offering both flexibility and potential advantages when planning ahead.

However, from April 2027, changes to how pension death benefits are treated may alter this position.

While the detail will depend on individual circumstances, pensions may increasingly form part of the wider estate when calculating inheritance tax. This shift could have a meaningful impact on how retirement assets are used, retained, or passed on.

For those who have built up significant pension wealth, often over decades, this represents an important moment to reassess. Decisions around whether to draw from pensions, how other assets are utilised, and who ultimately benefits from them may all require reconsideration.

Importantly, this is not simply a technical change. It has practical implications for families who want to pass wealth on efficiently and in line with their intentions.

In a changing landscape, assumptions can quickly become outdated. A strategy that worked well historically may no longer be the most effective approach going forward.

This is where financial planning adds real value, helping ensure that pensions, alongside other assets, are aligned with both current legislation and longer-term family objectives.

Read more about how you may be affected by the pension changes in 2027.

To discuss your pension options contact us on  0330 320 9280, email info@cravenstreetwealth.com or complete our online enquiry form 

 The content of this article is for information only and does not constitute formal financial advice. This material is for general information only and does not constitute investment, tax, legal or other forms of advice.

References to legislation and tax is based on our understanding of United Kingdom law and HM Revenue & Customs practice at the date of publication. These may be subject to change in the future. Tax rates and reliefs may be altered. The value of tax reliefs to the investor depends on their financial circumstances. No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of these comments.

You should not rely on this information to make, or refrain from making any decisions. Always obtain independent, professional advice for your own particular situation.

Craven Street Financial Planning Limited is authorised and regulated by the Financial Conduct Authority (FCA). The FCA does not regulate tax advice.