The Spring Statement: 4 things the Chancellor didn’t say that’ll affect your pension and inheritance tax
The Chancellor stood up on 3rd March, gave her Spring Statement, and sat back down. No new taxes. No surprise announcements. But, for anyone thinking seriously about pensions, inheritance tax or passing on wealth to family, what wasn’t said matters just as much as what was.
1. It’s not a Budget, but it tells you where things are heading
It isn’t a Budget. Think of it as a health check on the nation’s finances. The Office for Budget Responsibility (OBR) publishes updated forecasts, and the Chancellor responds. This year, the OBR projects GDP growth of just 1.1%, with inflation falling to around 2.3%. So far, so steady.
But buried in the detail, the OBR flagged the growing cost of an ageing population across health, social care and pensions. Unless spending is cut, the money has to come from somewhere. The most likely route? More of what we’ve already seen: frozen thresholds, tweaks to reliefs, and quiet changes that raise tax without making the news.
2. Your pension is about to become part of your estate
This is the one to watch. From April 2027, unused pension funds and most death benefits will fall within the scope of inheritance tax. For years, pensions have sat outside the IHT net, making them a brilliant tool for passing wealth to the next generation. That advantage is being curtailed. Transfers to a surviving spouse or civil partner, and payments to charity, remain exempt. But for most other beneficiaries, your pension pot will count as part of your estate.
If you’re a younger, higher earner putting as much as you can into your pension, this matters to you too. Pensions remain one of the most tax-efficient ways to save. But who gets what when you die, and what tax they pay on it, is about to look very different. Beneficiary nominations, drawdown plans and the balance between pension and non-pension wealth all deserve a fresh look.
3. Frozen thresholds are doing the heavy lifting on inheritance tax
The nil rate band has been frozen at £325,000 since 2009 and will stay frozen until at least April 2031. The residence nil rate band remains at £175,000. Meanwhile, property values and investment portfolios have kept climbing. More families are being caught by inheritance tax each year, without a single rate rise. It’s fiscal drag, pure and simple.
On top of that, from April 2026, Business Relief (formerly known as business property relief) and agricultural property relief are being capped. The first £2.5 million of combined business and agricultural assets qualifies for full relief, but anything above drops to 50%. AIM shares fall to 50% across the board.
4. There’s plenty you can do right now
You don’t need to predict the next Budget to make good decisions now. Check your pension beneficiary nominations are up to date. Review your will and any trust arrangements in light of the incoming pension and IHT rules. Think about gifting: annual exemptions, potentially exempt transfers and regular gifts from surplus income remain effective ways to pass on wealth during your lifetime. And make sure the paperwork is in order, from powers of attorney to expression-of-wish letters.
None of this requires a crystal ball. All of it puts you in a stronger position, whatever the Chancellor does next.
Get in touch
If you’d like to talk through how any of this affects you, do get in touch. The best time to plan is always before you have to.