This is Money Podcast Bonus episode: The big questions people are asking on pensions and inheritance tax - and the answers
Sep 25, 2025
Lisa Caplan, Director at Charles Stanley Direct Advice and Guidance, shares her deep expertise in pensions and inheritance tax. With major proposed changes looming, she discusses how pensions and estate planning are more critical than ever. Lisa underscores the importance of spending pensions for retirement rather than merely avoiding taxes. She also highlights strategies for minimizing inheritance tax exposure and practical tips on gifting and tax-free cash options. Listeners gain valuable insights on effective wealth management and planning ahead for the upcoming Budget.
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Pensions Joining The IHT Net
- Pensions will be included in the inheritance tax calculation from April 2027, likely increasing estates paying IHT from ~4% to ~7%.
- Many people used pensions as an IHT vehicle, so this change forces rethinking inheritance planning.
Act Early On Inheritance Tax
- Think about inheritance tax planning early because you have more options and time to act.
- Spend or give away money now if affordable, as gifts are effectively 40% cheaper than leaving them as taxable inheritance.
Plan For Care Costs Before Gifting
- Model potential care costs and set aside what you might need so you can still gift responsibly.
- Use the 'excess income' rule to give away regular spare pension income tax-free if you can prove it's truly spare.