\n New details released by HM Revenue and Customs this week reveal how unused pensions will soon be counted as part of a person\u2019s estate for inheritance tax purposes: a move experts warn could create a huge administrative burden for grieving families.\n<\/p>\n
\n The reforms, due to take effect from April 2027, are designed to stop pensions being used primarily as inheritance tax planning tools rather than for retirement income.\n<\/p>\n
\n But PensionBee says the practical impact on ordinary families could be significant.\n<\/p>\n
\n Maike Currie, vice president of personal finance at PensionBee, warned: \u201cAn admin nightmare is waiting in the wings for grieving families.\u201d\n<\/p>\n
\n She said executors and family members could effectively become \u201cpension detectives\u201d, tasked with tracking down old workplace pensions, forgotten accounts and online-only schemes – often while coping with bereavement at the same time.\n<\/p>\n
\n Under the new rules, personal representatives handling someone\u2019s estate will be responsible for locating pension pots, obtaining valuations, calculating inheritance tax liabilities and reporting the information to HMRC through a new online system.\n<\/p>\n
\n Currie warned this could involve searching through old paperwork, emails, historic pension providers and incomplete records.\n<\/p>\n
\n One of the biggest changes is that most unused pension funds and some pension death benefits will count towards inheritance tax calculations from April 6 2027.\n<\/p>\n
\n However, some exemptions will remain in place.\n<\/p>\n
\n Transfers to spouses and civil partners will still be exempt from inheritance tax, while death-in-service benefits are expected to remain outside the rules.\n<\/p>\n
\n HMRC also confirmed pension schemes may be allowed to temporarily withhold up to 50 per cent of pension death benefits until inheritance tax bills are settled.\n<\/p>\n
\n According to PensionBee, the measure is intended to prevent families having to sell non-pension assets to cover tax liabilities.\n<\/p>\n
\n Despite the concerns, there was some reassurance for bereaved relatives.\n<\/p>\n
\n Currie said HMRC had indicated that, in most cases, up to half of pension death benefits should still be released relatively quickly while tax calculations are ongoing.\n<\/p>\n
\n Recommended reading:\n<\/p>\n
\n The Government is expected to continue publishing guidance and support tools throughout 2026 as pension providers prepare for the overhaul.\n<\/p>\n
\n Experts are now urging savers to review their pension records and ensure beneficiary details are fully up to date with every provider.\n<\/p>\n
\n Currie added: \u201cClear beneficiary information and accurate records could significantly reduce delays, confusion and stress for loved ones later on.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"New details released by HM Revenue and Customs this week reveal how unused pensions will soon be counted…\n","protected":false},"author":2,"featured_media":586994,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,4174,4175,56,54,55],"class_list":["post-588970","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-personal-finance","tag-personalfinance","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/588970","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=588970"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/588970\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/586994"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=588970"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=588970"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=588970"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}