Two fifths (40 per cent) of UK adults aged 55 or over remain “completely unaware” of new rules that will bring pensions into the scope of inheritance tax (IHT) from April 2027, research from Canada Life has revealed.

According to the latest official data, the change announced by the government in October’s Autumn Budget is expected to almost double the number of estates subject to IHT, with nearly one in 10 (8 per cent) forecasted to be captured by the tax each year by 2030.

Among those aware of the change and have already changed their financial plans, 57 per cent planned to spend more of their savings, 41 per cent planned to gift more, and 38 per cent intended to withdraw a lump sum from their pension.

More than one in 10 (11 per cent) had also considered marriage to pass wealth tax-free to a partner.

The research also revealed that a third (36 percent) of those aged 55 or over were unaware of any listed current gifting rules, which could help reduce IHT.

Commenting on the findings, Canada Life tax and estate planning specialist, Stacey Love, said: “Despite the announcement in October’s Autumn Budget, our research reveals that 8.5 million adults 55 or over are completely unaware that pensions will be included in estates from April 2027, making them subject to IHT.

"Although it seems like a long time away, many people may not yet realise that these changes could draw them into the inheritance tax net or could mean loved ones paying a higher amount on their estate.

“Fundamentally, it’s never too early to start considering what the implications may be for you and how you may be able to manage your inheritance tax bill during your lifetime – such as through gifting or setting up a trust.

"It’s also important to think about your retirement plans in light of the changes as well. You may want to consider seeking professional advice to help with your roadmap in later life.”

This article originally appeared in our sister publication Pensions Age.

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