UK inheritance tax reforms on pensions set to reshape retirement planning

A new study by Moneybox finds that about one in five UK adults – roughly 10 million people – expect to receive an inheritance to fund retirement, with an average expectation of £56,535. Financial experts warn that relying on such expectations is risky, noting that “quietly factoring future inheritance into retirement plans is not only risky, but potentially devastating if fully relied upon,” said Brian Byrnes, Director of Personal Finance at Moneybox.

From April 2027, reforms will bring unused pension pots into the scope of inheritance tax (IHT). Research by NextWealth and Quilter, based on interviews with advisers, describes the change as a “seismic shift” in client conversations. Advisers report increased workload, emotional client reactions, and a rush to revisit deferred estate‑planning discussions. Delays are said to narrow options and raise the risk of complaints, with Roddy Munro of Quilter calling the reform “far bigger than Pension Freedoms in 2015” and warning that “the biggest risk is not necessarily making the wrong decision, but doing nothing at all.”

The combined findings highlight the need for early family dialogue and proactive restructuring of pension assets to avoid sub‑optimal outcomes for both clients and advisory firms.