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Independent Money - How to prepare for pension IHT reforms

Journalist: Marc Shoffman, Freelance

ended 26. February 2026

Hi,

I am writing a piece for The Independent's Money section looking at the impending pension IHT reforms from April 2027.

I am keen for comments on what pension savers should do now as the 12 month countdown approaches.

Should older people start gifting? Should people be maximising their contributions now?

Is it worth taking out insurance to protect against potentially larger inheritance tax payouts

Kind regards

Marc

 

 

3 responses from the Newspage community

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Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
April 2027 sounds a long way off. It really isn't. We are encouraging people to start planning now to consider what steps they should take. By April of next year, there are likely to be more people who need advice than advisors to give it, especially those who have been flying just under the IHT radar.
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Editor
Nouran Moustafa
Practice Principal & IFA at Roxton Wealth
The key message is don’t panic, but don’t ignore it either. Pension IHT changes from 2027 mean pensions may no longer sit entirely outside the estate, so people should review their wider estate planning now rather than later.

For some older clients, gifting can be sensible, but only if it doesn’t compromise their own financial security. Longevity risk is real, and giving away too much too soon can create problems later.

Maximising pension contributions may still make sense for those in the accumulation phase, particularly given the income tax benefits, but decisions should be aligned with retirement and legacy goals, not driven purely by tax changes.

Insurance can play a role in covering a potential IHT liability, but it should complement a structured estate plan, not replace one. This is about proactive planning, not last minute reaction.
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Colin Low
Managing Director at Kingsfleet
For now, change nothing. It’s really important to remember that until 6th April 2027, the current rules apply so should anyone die between now and then, their personal pension assets will still be outside their estate.

However, do start the planning now. Perhaps an individual has been drawing on other assets and leaving their pension fund untouched, but it now may be wise planning to draw on the pension income and use the other assets for Estate Planning arrangements.

These may include plans such as Loan Trusts, Reversionary Trusts or Discounted Gift Trusts which have varied levels of access and speed of leaving the estate. Alternatively, it’s worth considering Business Relief investments which, although illiquid and higher risk, have no IHT liability if held for over 2 years at the time of death.

Each client will need to have specific advice on the most suitable combination of arrangements for them and for the level of risk that they are willing to take.