Money Box Inheritance Planning and State Pension Underpayments
Oct 4, 2025
The podcast dives into upcoming changes to pension inheritance rules set for 2027, highlighting confusion around tax implications for families. Listeners are educated on the state pension underpayment crisis, particularly affecting women who paused work for caregiving. There's a discussion on the rising costs of student living, with new research revealing maintenance loans barely meet needs. Finally, challenges with HMRC's outreach and claims processes are explored, alongside insights on the decline of local currencies.
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Pension Pots Become Taxable In Estates
- From April 6, 2027 unused defined contribution pensions will be included in estates for inheritance tax calculations.
- This change may expose more estates to IHT and complicate retirement planning, especially for those who defer withdrawals.
Use Pensions To Create Income Now
- Consider using pension savings to purchase guaranteed income or drawdown rather than leaving large unused pots.
- Use pensions to generate retirement income proactively to reduce future IHT exposure rather than reacting after the change.
Double Tax Risk For Over-75 Deaths
- Dying over age 75 triggers income tax on pension withdrawals and then inheritance tax on the estate, producing a potential double tax hit.
- High-rate beneficiaries could face combined tax burdens that dramatically reduce inherited pension value.