What changes on 6 April 2027?

Most unused pension funds and pension death benefits will be included in the value of your estate for inheritance tax. Until then most pensions sit outside the estate.

Does this affect everyone?

No. HM Treasury estimates around 213,000 estates a year hold inheritable pension wealth, of which roughly 10,500 will become liable for inheritance tax where they would not have been before.

Deadline · 6 April 2027

Most pensions are about to count towards inheritance tax.

If your plan assumed your pension would pass outside your estate, it was right until now — and needs another look before the rules change.

6 April 2027when the rules change

From that date, most unused pension funds and pension death benefits are included in the value of your estate for inheritance tax. Until then, most personal and workplace pensions sit outside it — which is why pensions have been one of the most tax-efficient ways to pass wealth on.

The change is legislated. What it means for you depends on the size of your estate, who you intend to benefit, and how your pension is currently set up.

Who this affects

Not everyone — but more people each year.

Around 213,000 estates a year hold inheritable pension wealth

HM Treasury's own estimate for 2027–28. Most of those estates will still pay no inheritance tax.

About 10,500 estates become newly liable

Roughly 1.5% of UK deaths — estates that would not have paid inheritance tax under the current rules, and will under the new ones.

Some benefits stay outside the estate

Dependants' scheme pensions, death-in-service benefits and charity lump sum death benefits stay outside the charge, among others.

If your estate including your pension is comfortably under the available allowances, this may change nothing for you. If it is close to or above them, it is worth modelling before 2027 rather than after.

Source: the figures above are the government’s own estimates, published in Inheritance Tax: unused pension funds and death benefits (HM Treasury and HM Revenue & Customs). Figures are correct at the date shown and the rules remain subject to change before April 2027.

What to review

Five things worth checking now.

1 Whether your estate, including pensions, is likely to exceed the allowances available to you.

2 Who your pension death benefit nominations currently name — and whether that is still what you intend.

3 The order you plan to draw on pensions, ISAs and other savings in retirement.

4 Whether gifting during your lifetime fits your circumstances, and what you would need to keep.

5 Whether any existing trust or will arrangements still do what you set them up to do.

Try the inheritance tax calculator

Read further

There is time — but not unlimited time.

A free initial conversation, 20 to 30 minutes, to work out whether this affects you at all. If it does not, we will say so.