Early pension planning is key to managing the potential impact of ‘double taxation’ when unused pension pots are brought into the scope of inheritance tax (IHT) from April 2027, Hymans Robertson Personal Wealth has argued.

The firm emphasised that there was a window of opportunity to assess the impact of the changes on individual circumstances ahead of the reforms coming into force.

It warned that decisions being delayed until the last minute could unintentionally leave more wealth exposed to IHT and potentially income tax on inherited funds.

When reviewing pensions in the context of estate planning, Hymans called for a range of factors to be considered with appropriate advice, including how pensions interact with broader retirement income, estate planning objectives, beneficiary nominations, and other assets.

Hymans highlighted that early planning and developing a joined-up approach should help ensure individual priorities are considered prior to the changes, and not doing this risked poor decisions being made under time pressures.

Hymans Robertson Personal Wealth chartered financial planner, Angela Davis, noted that pensions had become one of the most valuable assets many people hold, and far more people will find their estates exposed to tax they had not expected when the changes come into force.

“The biggest risk to managing this change isn’t complexity, it’s inertia,” she continued.

“It’s important that people start to review how their pensions fit into their wider family and financial plans sooner rather than later.

“Planning earlier can allow people to approach decisions in a more measured and considered way, rather than reacting impulsively to change later on. It creates space to weigh up different priorities, such as maintaining financial security, supporting family, and understanding how tax may apply over time.

“As we get closer to 2027, the risk is that people default to inaction simply because these decisions feel complex and overwhelming. Those who engage earlier, either independently or with advice, are more likely to feel confident in their plans and how to adapt them.”

Davis highlighted the importance of each individual finding the right strategy for them, as there was not a single response to the changes.

This meant that taking a broader approach was key, as it opened up dialogue around how pensions interact alongside other assets over time, she said.

“Pensions are just one part of an individual’s overall financial position and need to be considered in financial planning, rather than treated in isolation,” Davis continued.

“This might involve reflecting on how income is drawn throughout retirement, how wealth may be passed on, or whether existing arrangements still align with current circumstances. Importantly, these are not one-off decisions. They will evolve over time and need to be regularly reviewed.

“Having a longer timeframe to work out the potential impacts of IHT allows individuals to explore options at their own pace and adjust course where needed.

“By contrast, leaving it later may mean choices become more constrained, with fewer opportunities to revisit or refine the approach.”

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