{"id":409045,"date":"2026-04-24T19:03:09","date_gmt":"2026-04-24T19:03:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/409045\/"},"modified":"2026-04-24T19:03:09","modified_gmt":"2026-04-24T19:03:09","slug":"inheritance-tax-warning-as-millions-of-savers-unaware-of-upcoming-pension-raids","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/409045\/","title":{"rendered":"Inheritance tax warning as millions of savers unaware of upcoming pension raids"},"content":{"rendered":"

A substantial majority of British workers remain unaware of pension reforms that will expose retirement savings to inheritance tax from April 2027, according to new research.<\/p>\n

A survey conducted by Barnett Waddingham among 2,000 employees found that 62 per cent of those with defined contribution workplace pensions had no knowledge of the changes.<\/p>\n

Chancellor Rachel Reeves announced the policy during her inaugural Budget, altering how unspent pension wealth is treated after death.<\/p>\n

From April 2027, funds remaining in private pension pots will be included in estate valuations for inheritance tax purposes.<\/p>\n

This lack of awareness risks leaving families facing bills of up to 40 per cent when relatives die.<\/p>\n

Currently, private pensions are exempt from inheritance tax, a protection that will be removed under the new rules.<\/p>\n

Inheritance tax is charged at 40 per cent on estates valued above \u00a3325,000, rising to \u00a3500,000 when a primary residence is passed to direct descendants.<\/p>\n

Government projections suggest including pension wealth in estate calculations will push an additional 10,500 estates above the threshold by the 2027\u201328 financial year.<\/p>\n

\"Pension\"\/<\/p>\n

‘Double taxation risk’: Workers unaware of pension tax raid set to hit families<\/p>\n

| <\/p>\n

GETTY<\/p>\n

The reforms mark a shift in how retirement savings are treated, turning funds many expected to pass to beneficiaries untouched into taxable assets.<\/p>\n

Families who have planned their financial legacies around existing rules may be particularly affected.<\/p>\n

The impact is greater where the deceased is aged 75 or over, as beneficiaries must also pay income tax on inherited pension funds.<\/p>\n

This creates a scenario in which the same pension savings may be taxed twice.<\/p>\n

\"StateAre you affected by state pension age changes? | GETTY<\/p>\n

Mark Futcher, partner at Barnett Waddingham, said: “What was intended as a legacy for family and loved ones could deliver significantly less in practice.”<\/p>\n

He warned the changes create a “risk for workers and their families of additional tax exposure”, with some facing double taxation.<\/p>\n

Financial advisers have raised concerns that many savers are not prepared for the implications of the reforms.<\/p>\n

Some pension holders have begun withdrawing their 25 per cent tax-free lump sums or increasing drawdowns to reduce potential inheritance tax liabilities.<\/p>\n

Wealth managers have also warned the changes could complicate probate processes, particularly for those with multiple pension pots.<\/p>\n

Since automatic enrolment was introduced in 2012, many workers have built up several pension accounts across different employers.<\/p>\n

Evelyn Partners has cautioned that failing to consolidate these pots could create administrative challenges for families.<\/p>\n

Andrew King of Evelyn Partners said: “Where there are several pension pots with different providers, this could not only prove a heavy administrative burden but also potentially hit the estate with interest charges.”<\/p>\n

He warned families may struggle to meet the six-month deadline for settling inheritance tax liabilities.<\/p>\n

The Government has rejected a House of Lords recommendation to extend the payment window to 12 months.<\/p>\n","protected":false},"excerpt":{"rendered":"A substantial majority of British workers remain unaware of pension reforms that will expose retirement savings to inheritance…\n","protected":false},"author":2,"featured_media":409046,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[114,268,85,11228,46,2101,43,5898,266,267,238,18122,52701,270,53490],"class_list":{"0":"post-409045","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-il","11":"tag-inheritance-tax","12":"tag-israel","13":"tag-money","14":"tag-news","15":"tag-pensions","16":"tag-personal-finance","17":"tag-personalfinance","18":"tag-politics","19":"tag-rachel-reeves","20":"tag-sgg","21":"tag-tax","22":"tag-uk-politics"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/409045","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=409045"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/409045\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/409046"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=409045"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=409045"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=409045"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}