From resolutions to diary dates: five money actions to take before April 2027
January is when we all promise to be “better with money”. This year, I want you to swap resolutions for diary dates.
The November budget confirmed a big change. From 6 April 2027, most untouched pension funds and some pension death benefits will be brought into scope of Inheritance Tax (IHT). In plain English, the pension pot you hoped would pass to family could be counted as part of your estate when HMRC works out the IHT bill. Death-in-service benefits from registered pension schemes are set to remain outside the estate, and the usual spouse, civil partner and charity exemptions remain.
The awkward bit is timing. April 2027 feels ages away, so people park it. HMRC’s own impact note says most estates will still have no IHT liability after the change, but it also estimates around 10,500 estates could be pulled into IHT, and about 38,500 could pay more, with an average increase of roughly £34,000 on affected estates once pension assets are included. That is why we are supporting clients to act now, not in 2027.
Whether you are in your thirties earning well, or you are closer to retirement, the principle is the same. Make a plan while you still have options. Here are five diary dates to start with.
1) By the end of March 2026: find every pension and check the beneficiaries
Many higher earners have multiple pensions, including an old workplace scheme they have forgotten about. From April 2027, personal representatives (your executors) will be responsible for reporting and paying any IHT due on unused pension funds and death benefits, so missing paperwork can cause delays. Make a list of providers and policy numbers and update your expression of wish or beneficiary nominations. A useful strategy to consider is to consolidate personal pensions into one plan to reduce the administrative burden.
2) Before 5 April 2026: rethink the “pension is the last pot” idea
For years, many people have lived off ISAs and other investments first, leaving the pension untouched because pensions often sat outside the estate. The government has been clear this reform is meant to stop pensions being used and marketed mainly as an IHT planning tool, and to steer them back towards funding retirement. Your strategy may still be right, but it now needs a numbers-based review to consider taking or increasing pension income to reduce the pension pot value.
3) Summer 2026: refresh the IHT basics and make sure your will still fits
Financial foundations matter. The nil rate band is £325,000, and the residence nil rate band can add up to £175,000 per person if a home is left to direct descendants, with current freezes running to at least April 2028. If your estate is near or above those levels, your will, beneficiary nominations and investment wrappers need to line up.
4) Autumn 2026: plan for cash flow, not just tax
A practical sting in the tail is “who pays first?”. HMRC is introducing a mechanism allowing personal representatives to direct pension scheme administrators to withhold 50% of taxable death benefits for up to 15 months, and to pay IHT to HMRC before releasing the rest. That can help administration, but it can slow down money reaching loved ones. Commentators have warned about delays and extra complexity for bereaved families.
If your SIPP holds illiquid assets, such as commercial property, cash flow can be tighter because beneficiaries may struggle to raise funds quickly without selling at a discount.
5) January to March 2027: decide what happens first, and tighten the paperwork
By early 2027 you want decisions made, not still “thinking about it”. Revisit drawdown, gifting and protection with proper modelling. In some cases, using pension money earlier can reduce what is left in the estate. In other cases it can create an income tax problem or undermine retirement security. Leaving it too late removes options.
The bottom line
These changes are not here yet, but the planning window is open. Put the dates in the diary, get the facts together, then take regulated advice on the right moves for you.
At Best Advice Wealth Management, we specialise in providing expert, holistic advice through keeping abreast of regulatory changes and taking into account our clients’ circumstances and needs.
Get in touch today if you’d like a tailored plan. We can model your options, help update your paperwork, and keep you on track to meet your financial goals.