sm128 - Flipbook - Page 9
Retirement
For the 2026/27 tax year, the standard IHT threshold is £325,000,
with an additional £175,000 allowance if you pass your main
residence to direct descendants. Adding a substantial retirement
pot to your estate could easily push many families over these
thresholds, leading to unexpected tax bills for grieving loved ones.
T
his policy change marks a
reassess the order in which you draw down
accurate information, we aim to help you make
fundamental overhaul of the wealth-
your retirement assets. Using your pension to
well-informed decisions that protect and
transfer system. The government
fund your lifestyle earlier in retirement, while
optimise your hard-earned wealth. With our
announced that it was introducing this
preserving other assets that may benefit from
support, you can approach these changes with
measure to create a fairer tax framework and address
different tax treatments, could soon become the
confidence, knowing you have the insights
wealth inequality. For many families, this means that
standard approach for many households.
to adapt and thrive in an ever-evolving tax
landscape. t
the money accumulated over a lifetime of hard work
may suddenly be subject to a substantial tax burden
Practical steps to protect your legacy
when passed on to beneficiaries.
Although the changes do not take effect until
April 2027, early preparation will put you in a
Tıme to discuss how the
new pension rules could affect
your family’s inheritance?
How the forthcoming
tax framework operates
much stronger position. Initially, it’s important
Research indicates that 9 in 10 (89%) UK adults
estate, including your current pension balances,
The upcoming changes require careful
have little or no awareness of the change [1]. When
to give you a clear picture of your potential IHT
planning and a thorough understanding of
the new rules take effect, your remaining pension
exposure under the new regime.
estate planning and preservation. If you want
to calculate the projected value of your entire
funds will form part of your estate’s total value on
You might also consider alternative ways to
to know exactly how the April 2027 pension
your death. If the combined value of your assets,
reduce the taxable value of your estate before
rules could affect your family’s inheritance,
including property, cash savings, investments
the deadline. Making lifetime gifts to your family,
please contact us as soon as possible to
and pensions, exceeds the standard nil rate
utilising annual exemptions or exploring trust
arrange a comprehensive review of your
band, the excess will typically be taxed at 40%.
structures can help mitigate the impact of these
retirement strategy.
For the 2026/27 tax year, the standard IHT
changes. Each situation requires a tailored
threshold is £325,000, with an additional £175,000
approach based on personal goals and family
allowance if you pass your main residence to direct
circumstances.
descendants. Adding a substantial retirement pot
to your estate could easily push many families over
Securing your family's future
these thresholds, leading to unexpected tax bills
Pensions and tax legislation are inherently
for grieving loved ones.
complex, and their intricacies often pose
challenges for individuals and businesses alike.
Rethinking your long-term wealth strategy
They are also frequently subject to subtle yet
Historically, most people have spent other
significant adjustments before reaching their
taxable assets first, leaving their pension funds
final stage of implementation. Navigating these
untouched as an effective wealth-transfer tool.
changes can be daunting, but staying informed is
Because pensions were shielded from IHT, they
crucial to making sound financial decisions.
provided a safe harbour for inheritance, allowing
We are committed to keeping you up to date
funds to grow in a tax-advantaged environment.
on the latest developments, including updates
The 2027 deadline forces a complete rethink
of this conventional wisdom. You may need to
to official guidance, new consultations and
proposed amendments. By providing timely,
Source data:
[1] Standard Life research IHT research was
conducted among 2,000 UK adults in February 2026.
Findings are weighted to be nationally representative.
This article is for informational purposes only and does
not constitute tax, legal or financial advice. Tax treatment
depends on individual circumstances and may change in
the future. A pension is a long-term investment not normally
accessible until age 55 (57 from april 2028, unless the plan
has a protected pension age). The value of your investments
(and any income from them) can go up or down, which will
affect the level of pension benefits available. Investments can
rise or fall in value, and you may get back less than you invest.
Inheritance tax, estate planning and trusts are not regulated
by the financial conduct authority.
09
