Chancellor Rachel Reeves’s Autumn Budget decision to end pension pots’ exemption from inheritance tax (IHT) could leave families facing bills of more than £80,000 on even modest estates, according to analysis from Quilter.
From April 2027, unused pension assets will be treated the same as property and investments for IHT purposes, with estates above the existing thresholds subject to charges of up to 40%. Quilter found that a working-age single homeowner in England with an average-priced property (£290,395) and a "moderate" pension (£415,000) would generate a tax bill of £82,158. In London, where house prices are higher, the combination of an average home (£565,637) and the same size pension pot would leave beneficiaries paying £192,254. Joint ownership would soften that to £129,127. In joint-ownersh...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
