# UK inheritance tax and pension withdrawal trends

> Live situation record from CLSTR: https://clstr.news/situations/uk-inheritance-tax-and-pension-withdrawal-trends
> Updated: 2026-10-21T07:17:14.000Z. Sources: 2. Developments: 2.

Data from the Financial Conduct Authority indicates a significant surge in UK pension withdrawals, reaching £91.2 billion in 2025/26. This represents a 21.7% increase from the previous year and a 70% rise compared to 2023/24. The increase is driven largely by individuals with larger pension pots, with those holding £250,000 or more more than doubling in number entering drawdown. Experts suggest this trend is a reaction to planned government tax changes, specifically the introduction of inheritance tax on most unused pension funds and death benefits scheduled for April 2027.

Concurrently, HMRC figures show that inheritance tax receipts reached a record monthly high of £936 million in September 2026. Total receipts for the first six months of the 2026/27 financial year rose to £4.72 billion. Analysts attribute the rising collections to frozen tax thresholds and increasing asset values, noting that upcoming reforms are expected to further expand the tax net.

## Claims

- UK inheritance tax receipts reached £936m in September 2026. (corroborated by 2 sources)
- The Office for Budget Responsibility forecasts IHT receipts will reach £9.5bn in the 2026/27 financial year. (corroborated by 2 sources)
- September 2026 receipts were £265m higher than in September 2025. (single source)
- Total inheritance tax receipts for the first six months of the 2026/27 financial year reached £4.72bn. (single source)
- The nil-rate band for inheritance tax has remained at £325,000 since 2009. (single source)
- Unused pension pots will fall within the scope of inheritance tax from April 2027. (single source)

## Timeline

### 2026-10-21: UK inheritance tax receipts reach record £936m in September

UK inheritance tax receipts hit a record £936m in September 2026, driven by frozen thresholds and rising asset values. Total receipts for the first half of the financial year reached £4.72bn.

2 sources. https://clstr.news/cluster/uk-inheritance-tax-receipts-reach-record-936m-in-september

### 2026-09-24: UK pension withdrawals surge to £91bn amid tax uncertainty

UK pension withdrawals reached £91.2 billion in 2025/26, a sharp increase driven by uncertainty over upcoming inheritance tax changes and potential restrictions on tax-free cash.

3 sources. https://clstr.news/cluster/uk-pension-withdrawals-surge-to-91bn-amid-tax-uncertainty

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Cite as: UK inheritance tax and pension withdrawal trends. CLSTR, https://clstr.news/situations/uk-inheritance-tax-and-pension-withdrawal-trends