Navigating the UK Autumn Budget: What It Means for Your Pensions and Estate

With Chancellor Rachel Reeves under pressure to raise revenue, the Treasury is reportedly exploring a range of tax measures — making this a critical time to review your retirement and estate planning strategy.

In the 2024 Autumn Budget, the government announced a fundamental shift in how pensions will be treated for inheritance tax (IHT) purposes. From April 2027, most unused pension funds will now form part of your taxable estate upon death. This reverses a policy that had long allowed pensions to be passed on IHT-free, particularly when the holder died before age 75.

Since the pension freedoms of 2015, many families have deliberately left pensions untouched to transfer wealth efficiently across generations. That long-standing approach has now been upended. Under the new framework, those nearing or already in retirement may need to rethink their withdrawal strategy to avoid an unexpected IHT burden.

We’re already seeing an increase in individuals over 75 accessing their tax-free cash allowances earlier. Under the new legislation, if you die after April 2027 without having taken this entitlement, it will be lost — and the full value of your pension could become taxable. This represents a complete reversal of previous guidance, where deferring withdrawals often made sense from an estate-planning perspective.

As ever, it’s essential to remember that tax rules depend on individual circumstances and remain subject to change. The key is not simply to react to new legislation but to ensure your long-term financial plan evolves alongside it.

At Renascence, we work with clients to structure pensions, investments, and estates in a way that remains efficient and adaptable — even as the rules shift. With careful planning, your financial strategy can stay aligned with your goals, whatever the next Budget brings.