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Pensions: Dead… but Not Dead

ended 19. November 2025

Why rumours of their demise are greatly exaggerated — and we’re asking advisers to share their own examples.

With the Government announcing that Inheritance Tax will apply to pension pots from April 2027, many people – including some professionals – may now assume pensions are “dead” as a planning tool.

But as Scott Gallacher, Director at Rowley Turton, explains, that couldn’t be further from the truth.

“Despite the upcoming IHT changes, pensions remain one of the most powerful planning vehicles we have. For many clients, they still offer outstanding retirement, tax, and even estate planning opportunities.”
— Scott Gallacher, Rowley Turton

Scott’s recent client example

Scott recently worked with a small business owner couple who plan to retire three years before their State Pension age.

“The wife had only a nominal pension fund, so we identified that the business could build a £50,280 pension pot for her over several years, benefiting from 26.5% corporation tax relief. When she comes to draw it, she can take 25% tax-free, and the remaining 75% can be withdrawn over three years — essentially tax-free — by fully using her personal allowance before her State Pension starts.”
— Scott Gallacher

This simple yet highly effective strategy, which would save that couple almost £26,000 in tax, shows that pensions are far from dead — they simply require thoughtful planning in the new landscape.

We’re asking other advisers to share their examples

Advisers across the UK will already be developing creative, ethical, client-centred approaches to the upcoming 2027 changes. We want to gather them.

  • Have you found smart ways to help clients adapt to the pension IHT shift?
  • Are you still seeing strong tax or retirement benefits from pension funding?
  • Do you have anonymised case studies that highlight where pensions still shine?

Pensions aren’t dead — and as Scott says, they remain one of the most effective planning tools we have.

5 responses from the Newspage community

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Editor
Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
Pensions are complicated and full of traps, tapers and treasure. The inheritance tax changes from 2027 have added to that complexity but the basics remain true. Pensions are a fantastic way of saving for your retirement. If you can get higher rate tax relief on the way in, tax free growth whilst you wait and then potentially draw it out at a lower tax rate in retirement, then a pension is a powerful combination but it requires deliberate thought. It's too easy to ignore pensions and miss the opportunity.
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Chris Barry
Director at Thomas Legal
Pensions are becoming less attractive by the day. The option is still an attractive way to reduce your net income which many see as a positive to stick within set income tax bands but as a savings plan for retirement and beyond, there are other options which may take preference. That said, the government are highly likely to restrict other options such as ISAs and property making all long term saving/investment plans worse than they were for previous generations
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Eamonn Prendergast
Chartered Financial Adviser at Palantir Financial Planning Ltd
Rumours of pensions’ death have been greatly exaggerated.” Even with the 2027 inheritance tax changes, pensions remain one of the most powerful tools for retirement and tax planning. The real shift isn’t the end of pensions it’s the end of complacency. Savers will need smarter, more deliberate strategies to make the most of their allowances, reliefs, and drawdown options. For business owners and higher earners in particular, pensions still offer unique tax advantages that no other investment wrapper can match. With thoughtful planning, they’re far from dead they’re evolving.”
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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
Pensions are still a great bucket to save in to for retirement.

A business owner channeling revenue into their pension, can go from an effective tax rate around 25pc best case, down to 15pc.

Higher earners can go from paying 47pc away taking the money today, to an effective 15pc.

There are other ways to mitigate and deal with IHT like trusts, gifting strategies and insurance.
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Daniel Wiltshire
Actuary & IFA at Wiltshire Wealth
Pensions are facing a PR catastrophe. Even if the wildest pre-budget rumours were true, it wouldn’t change the fact that they’re still the best way to save for retirement. By undermining trust in the system, the government is fuelling misconceptions and causing long-term damage. Restoring confidence is essential to encourage people to save for the long-term and take responsibility for their own retirements.