Upcoming changes that will see unused pensions come into the scope of inheritance tax (IHT) will apply to the pension pots of people who die before reaching minimum pension age.

Pensions Age understands that there will be no link to age for the measures that will see unused pensions being subject to IHT charges.

The current minimum age at which people can access their pension savings is 55, although this is set to rise to 57 in 2028.

Those who die prior to reaching minimum pension age will see their pension pots being subject to IHT.

From April 2027, unused pension pots will be in scope of IHT, with the government having published related draft legislation in July 2025.

It has now been confirmed that the changes will apply to people who do not reach the age at which they can start accessing their pension.

An HM Treasury spokesperson said: “We continue to incentivise pensions savings for their intended purpose – of funding retirement instead of them being openly used as a vehicle to transfer wealth – and more than 90 per cent of estates each year will continue to pay no inheritance tax after these and other changes.”

Also commenting on the news, WBR Group director of SSAS transformation and proposition, Caitlin Southall, said: “Including ‘unused’ pension funds in scope for IHT is unbelievably unfair.

“If people cannot ‘use’ these funds under current rules, why should they be subject to IHT?

“The government are creating significant barriers for people to save responsibly for their retirement.

“By all means encourage people to use pensions for later life saving, and not as a wealth transfer tool, but this is not the way to do it.”

This article originally appeared on our sister title, Wealth Investment News.

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