Budget 2025: Up To 83% Tax On Pensions Post April 2027

As many in later life will know, pension ‘pots’ will be included in your estate for IHT purposes from April 2027 – unless the pension is transferred on death to your spouse or a registered charity. If you pass away after 75, then there is an income tax liability too on the drawing down of any pension inherited.

Unfortunately, in the absence of financial planning, the combination of income tax (assumed at highest rates), inheritance tax, as well as the possible reduction of the Residence Nil Rate Band (because the pension is now part of your taxable estate) means that un-used pensions could now be taxed up to an eye-watering 83% on death.

Now with the Chancellor struggling to meet her own fiscal rules, all eyes will be on the November Budget for an update on the proposed pension tax rules as well as other tax updates – all of which are not likely to mean happy reading for those in later life. Seeking out specialist later life financial planning advice in light of the new rules and any announcements in the Budget is more important than ever.

Therefore, over the next few months in the lead up to the Budget on 26th November we will be providing insightful commentary and advice for those in later life. This can be best accessed reviewing our regular blog articles and commentary on the Harold Stephens website and social media channels. You can find our YouTube channel here or by searching for ‘Harold Stephens IFA’ on YouTube and subscribe to the channel to get the very latest videos direct from Richard Higgs, later life financial planning specialist.

Finally, register and reserve your place at one of our post-budget Later Life Financial Planning live events to be held on Wednesday December 3rd 2025 by emailing community@haroldstephens.co.uk