Aetas Wealth

If you want one document that covers the full picture of the pension IHT changes — how they work, who is affected, and what the planning options are — this is it.

I wrote this as a reference piece for clients who want to understand the landscape before making decisions. It covers the interaction with the nil-rate band, the role of nominations, spousal deferral, and the timing of any drawdown strategy.

Nothing is dressed up. A straightforward briefing on a significant change: https://aetas-wealth.com/insights/posts/pensions-iht-2027-what-is-changing.html

Peter Rose APFS, Chartered Financial Planner, Aetas Wealth
https://aetas-wealth.com/insights/posts/pensions-iht-2027-what-is-changing.html

What is changing for pensions in 2027 A plain-English summary of the Finance Act 2026 pension inheritance tax changes taking effect on 6 April 2027.

https://link.aetas-wealth.com/sp/96a6b900eae

The date you die will affect the IHT treatment of your pension. That sounds blunt, but it is the reality of how this legislation has been drafted.

Before April 2027: pension funds generally pass free of IHT.
After April 2027: they don't — at least not automatically.

The difference in tax exposure between the two positions can be substantial, particularly for larger pension pots or where the fund is being held as an inheritance vehicle rather than drawn down for income.

I have set out a clear before-and-after comparison here: https://aetas-wealth.com/insights/posts/what-happens-to-my-pension-before-after-2027.html

Worth sharing with anyone currently reviewing their estate plan.

Peter Rose APFS, Chartered Financial Planner, Aetas Wealth

What happens to my pension if I die before or after April 2027? The Finance Act 2026 changes the inheritance tax treatment of pension funds from 6 April 2027. A plain-English comparison of the rules before and after the deadline.

Most people assume their pension passes to their family free of tax. For now, that is broadly true. From April 2027, it is not.

I have written a plain-English explanation of how pensions are currently taxed after death, what changes under the Finance Act 2026, and why the timing of any planning decisions matters.

If you have an unspent pension and an estate that could be subject to inheritance tax, this is the starting point: https://aetas-wealth.com/insights/posts/how-pensions-are-taxed-after-death.html

Peter Rose APFS, Chartered Financial Planner, Aetas Wealth

How pensions are taxed after death, before and after April 2027 How income tax and inheritance tax on inherited pensions interact, before and after April 2027.

𝟲𝟳% 𝗧𝗮𝘅 𝗼𝗻 𝗜𝗻𝗵𝗲𝗿𝗶𝘁𝗲𝗱 𝗣𝗲𝗻𝘀𝗶𝗼𝗻𝘀: 𝗪𝗵𝗮𝘁 𝘁𝗵𝗲 𝗡𝗲𝘄 𝗟𝗮𝘄 𝗠𝗲𝗮𝗻𝘀 𝗳𝗼𝗿 𝗬𝗼𝘂𝗿 𝗙𝗮𝗺𝗶𝗹𝘆
The Finance Act 2026 received Royal Assent on 20 March 2026. With it, the long-discussed change to the way pensions are treated on death has moved from speculation to statute. For many families, pensions are about to become one of the least efficient assets to pass on, rather than one of the most.

It is worth taking the time to understand what is actually changing, and what the numbers look like in practice.

𝗪𝗵𝗮𝘁 𝘁𝗵𝗲 𝗹𝗮𝘄 𝗻𝗼𝘄 𝘀𝗮𝘆𝘀
From April 2027, unused pension funds will form part of the inheritance tax estate. Where the pension holder is over 75 at the point of death, beneficiaries who later draw on the inherited fund will also pay income tax at their marginal rate. The two charges fall in sequence on the same money.

That sequence matters. It is not one tax or the other. It is one followed by the other, with the second applied to what remains after the first.

𝗧𝗵𝗲 𝗻𝘂𝗺𝗯𝗲𝗿𝘀 𝗺𝗼𝘀𝘁 𝗳𝗮𝗺𝗶𝗹𝗶𝗲𝘀 𝗵𝗮𝘃𝗲 𝗻𝗼𝘁 𝘆𝗲𝘁 𝗿𝘂𝗻
Take a £500,000 pension intended for adult children. Under the new rules, an inheritance tax charge of 40 per cent could reduce the fund to £300,000 before the children see any of it. If those children are higher rate taxpayers, income tax on the remaining amount could leave the family with around £165,000.

A combined effective rate of 67 per cent is not a worst case projection. It is the outcome the legislation produces for a fairly typical scenario.

𝗪𝗵𝘆 𝘁𝗵𝗶𝘀 𝗺𝗮𝘁𝘁𝗲𝗿𝘀 𝗻𝗼𝘄, 𝗻𝗼𝘁 𝗶𝗻 𝗔𝗽𝗿𝗶𝗹 𝟮𝟬𝟮𝟳
The temptation is to wait. The implementation date is more than a year away, and the rules feel distant. The risk in waiting is that the better planning options usually need time to put in place, and time to bed in. Reviewing nominations, restructuring how a pension is drawn, considering the wider estate alongside the pension rather than in isolation: these are not last-minute decisions.

Equally, not every client needs to act. For some families, the existing arrangements remain sensible even after the change. The point is not that everyone should reorganise their affairs. The point is that every affected family should now understand the actual numbers, and make a deliberate choice rather than an accidental one.

𝗔 𝗽𝗲𝗻𝘀𝗶𝗼𝗻 𝗿𝗲𝘃𝗶𝗲𝘄 𝘁𝗵𝗮𝘁 𝘁𝗮𝗸𝗲𝘀 𝘁𝗵𝗲 𝗻𝗲𝘄 𝗿𝘂𝗹𝗲𝘀 𝘀𝗲𝗿𝗶𝗼𝘂𝘀𝗹𝘆
If you would like to know how the Finance Act 2026 affects your own position, and what your realistic options are, we offer a no-obligation pension review with one of our advisers. The review covers your pension structure, your wider estate, your beneficiaries, and the planning options that genuinely fit your circumstances.

https://itw.aetaspartners.com/

itw.aetaspartners.com

📢 Free Webinar | Wednesday 15 April | 12:00pm

𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗪𝗲𝗹𝗹𝗯𝗲𝗶𝗻𝗴 𝗶𝗻 𝘁𝗵𝗲 𝗪𝗼𝗿𝗸𝗽𝗹𝗮𝗰𝗲 — Understanding Whether It Matters for Your Business

If you run a business or manage a team, this one's for you.

Financial stress is one of the biggest but least talked-about challenges affecting employees right now — and for smaller businesses, the impact on performance and retention can be very real.

Matthew Steiner and Daniel Cottam from Aetas Partners are hosting a free 45-minute online session to help you understand:

✅ Whether financial wellbeing is already affecting your team
✅ What practical, low-cost support looks like for an SME
✅ How small, structured changes can make a genuine difference

🗓 Wednesday 15 April 2026
⏰ 12:00 – 12:45pm
💻 Online
💷 Completely free

Financial Wellbeing in the Workplace, Understanding Whether It Matters for Your Business Join our free webinar to learn how Aetas in the Workplace helps organisations strengthen teams through smarter benefits & financial wellbeing

𝗜𝘀 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝘀𝘁𝗿𝗲𝘀𝘀 𝗮𝗳𝗳𝗲𝗰𝘁𝗶𝗻𝗴 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲?

Many SME leaders are recognising that financial pressure outside work can quietly affect focus, engagement, and productivity inside the workplace.

We are hosting a short webinar to explore Aetas in the Workplace and how businesses are supporting employees through:

• Employee benefits consultancy
• Financial wellbeing workshops and guidance
• Wellbeing and incentive initiatives

If you are a business owner, HR leader, or finance director, this session may provide some practical ideas worth exploring.

You can see the event details and register here:

👉

Financial Wellbeing in the Workplace, Understanding Whether It Matters for Your Business Join our free webinar to learn how Aetas in the Workplace helps organisations strengthen teams through smarter benefits & financial wellbeing