74% of savers unaware pension pots could be subject to IHT from April 2027 – Penfold

Nearly three quarters of savers did not know their pension pots could be subject to inheritance tax (IHT) from April 2027, research from Penfold found.

A snap survey found 74% of savers were unaware that unused pension funds will be included in the deceased’s estate for UK IHT from 6th April 2027. 

Chris Eastwood, co-founder and CEO of Penfold, said: “The new rules that are set to come into effect do reduce one of the major estate-planning advantages of pensions, but that being said, pensions remain one of the most tax-efficient ways to save for retirement.

“For the majority of savers, the possible impact will be limited as inheritance tax only applies where an estate exceeds relevant thresholds.

“Despite the incoming changes, pensions remain valuable to savers as they still offer income tax relief on contributions, tax-efficient investment growth, employer contributions, National Insurance savings through salary sacrifice, and continue to offer significant tax advantages for retirement saving.”

Eastwood added: “Nevertheless, while the tax advantages for retirement savings remain the same, the new inheritance tax reforms have reduced one of the tax advantages associated with leaving pension savings untouched later in life. 

“Regardless of the reforms, keeping beneficiary nominations up to date remains important to help pension providers understand your wishes.

“The incoming inheritance tax changes may make pensions look slightly less attractive as an estate planning tool.”