UK pension savers are continuing a significant increase in activity to avoid inheritance tax (IHT), a trend that shows “no sign of slowing down,” according to Barry O’Dwyer, chief executive of Royal London.
From April 2027, unused pension funds and death benefits will be included in a person's estate for IHT purposes. This policy change, alongside frozen tax thresholds, is expected to bring thousands more estates into the tax net.
Royal London reported that new pension sales increased by five per cent to £4.7bn, primarily through its workplace channel. O’Dwyer anticipates this heightened activity will persist for at least the next couple of years.
Attention is now turning to the upcoming Autumn Budget, scheduled for 28 October by Chancellor John Healey. O’Dwyer urged the Treasury to provide clarity to allow people to plan, referencing past speculation that led to rash decisions by some pension savers.