15/08/2025
From ๐ ๐๐ฉ๐ซ๐ข๐ฅ ๐๐๐๐, any ๐ฎ๐ง๐ฎ๐ฌ๐๐ ๐ฉ๐ซ๐ข๐ฏ๐๐ญ๐ ๐ฉ๐๐ง๐ฌ๐ข๐จ๐ง left when someone dies will be included in the value of their estate.
This means:
๐ฐ If the total estate value is over ยฃ๐๐๐,๐๐๐ (๐ฌ๐ข๐ง๐ ๐ฅ๐) or ยฃ๐๐๐,๐๐๐ (๐๐จ๐ฎ๐ฉ๐ฅ๐), loved ones may have to pay Inheritance Tax (IHT) on that pension โ even if the person never took a penny from it.
๐ ๐๐๐ฎ ๐๐๐๐ฉ๐จ:
Currently: If you die before age 75, unused pensions can usually be passed on tax-free.
From 2027: That protection is gone โ pensions will count towards the estate for IHT purposes.
Impact: Around ๐๐,๐๐๐ families a year could be affected, with average extra tax bills of ยฃ๐๐,๐๐๐.
Reason given: The government says it will help plug a ยฃ๐๐โ๐๐ ๐๐ข๐ฅ๐ฅ๐ข๐จ๐ง gap in public finances.
โ ๏ธ ๐๐๐ฎ ๐ฅ๐๐ค๐ฅ๐ก๐ ๐๐ง๐ ๐ฌ๐ค๐ง๐ง๐๐๐:
Families may be hit with unexpected bills at an already difficult time.
Estates that previously avoided IHT could now face large charges.
Executors may struggle with complex paperwork and delays in accessing funds.
It can feel unfair to those who worked hard, saved, and never used their pension.
โ
๐๐๐๐ฉ ๐ฎ๐ค๐ช ๐๐๐ฃ ๐๐ค ๐ฃ๐ค๐ฌ:
Review and update your will and beneficiaries.
Speak to a regulated financial adviser about your options.
Consider whether to draw some pension early (within tax rules).
Explore other ways to structure your estate to protect your family.
๐ฌ ๐๐จ๐ญ๐ญ๐จ๐ฆ ๐ฅ๐ข๐ง๐: This change could affect far more people than expected, especially those with property, savings, and pensions combined. Planning ahead now could save your loved ones thousands later.
โDon't forget we are the only funeral service in the area that provides people with educational and informative posts. For a more in depth look on "Death Tax", please visit our website https://www.oldhamindependentfuneralservices.co.uk/coming-soon-death-tax-hits-pension-pots-heres-what-you-should-know/
