Government proposals for changes to inherited pensions

In the autumn 2024 budget, the chancellor announced that the government plans to consult on whether unused pension pots will form part of an individual’s estate for inheritance tax purposes from April 2027.

This could mean that pension lump sums and death benefits from a pension might no longer be passed on tax free to your beneficiaries as they’d be added to the rest of your estate – property, money, possessions, etc. – when working out if any inheritance tax is due. The rules are complex, and the government consultation will continue throughout 2025 and into 2026 to determine if and how this new approach will be put into practice.

When details of any proposed changes are confirmed by the government, the Trustee will take specialist legal advice. We’ll update you in a future newsletter and on the website when more information is available.