5 Steps to Review Your Estate Plan Before the 2027 Pension IHT Deadline
The April 2027 pension inheritance tax changes are now less than two years away. From that date, unused pension funds will be brought within the scope of IHT for the first time — a significant shift that affects anyone with pension savings they are not planning to draw down fully in retirement.
If you have not yet reviewed your estate plan in light of these changes, now is the time to act. Here are five practical steps to take before the deadline.
Review and update your pension nominations
Your expression of wishes — the form that tells your pension provider who should receive your pension on death — may have been completed years ago. With the rules changing, it is worth reviewing whether your nominations still reflect your intentions. In some cases, it may make sense to redirect pension nominations to a surviving spouse (who can inherit free of IHT) rather than directly to children.
Get a clear picture of your total estate value
Many people do not have an up-to-date view of their total estate — property, savings, investments, business interests, and now pensions combined. Before you can plan effectively, you need to know where you stand. A financial adviser can help you build a complete picture and identify where the IHT exposure lies.
Consider adjusting your drawdown strategy
If you are in retirement and drawing an income from your pension, it may be worth reviewing how much you are drawing and from which sources. Drawing more from your pension now — and preserving other assets — could reduce the pension pot that will be subject to IHT, while keeping your overall income the same. This needs careful modelling to ensure it does not create other tax problems.
Explore gifting and potentially exempt transfers
Gifts made more than seven years before death fall outside your estate for IHT purposes. If you have assets you are comfortable giving away now, starting a structured gifting programme could meaningfully reduce your estate over time. You can give up to £3,000 per year free of IHT using the annual gift exemption, with unused allowance carried forward one year. Larger gifts are potentially exempt transfers — they leave your estate after seven years, with taper relief reducing the IHT charge in years three to seven.
Review your will and consider life insurance
Your will may have been written at a time when pensions sat outside your estate. It is worth reviewing whether it still achieves what you intend — particularly if it was structured to take advantage of the pension IHT exemption. A whole-of-life policy written in trust can also provide a lump sum to cover any IHT liability without reducing the estate passed to your beneficiaries.
The importance of acting early
Some of these steps — particularly gifting strategies and potentially exempt transfers — take time to become fully effective. A gift made in 2026 will fall outside your estate in 2033. A gift made in 2028 will not fall outside your estate until 2035. The earlier you act, the more effective these strategies become.
Estate planning is not a one-off exercise. It needs to be reviewed regularly as your circumstances change — and the April 2027 rule change is a clear prompt to review it now.
Get independent advice tailored to your situation
The right approach depends entirely on your individual circumstances. At SBC Financial, we work with clients across East Lothian and central Scotland to build estate plans that are practical, tax-efficient, and aligned with their wishes.
As an independent financial adviser, we are not tied to any product provider — so our advice is always in your best interest.
Start your estate plan review today
Book a free, no-obligation consultation with one of our independent financial advisers. We will review your current position and explain your options before the April 2027 deadline.
Book your free consultationSBC Financial is authorised and regulated by the Financial Conduct Authority (FCA ref 997666). This article is for information purposes only and does not constitute financial advice. Tax treatment depends on individual circumstances and may be subject to change. You should seek independent financial advice before making any decisions about your pension or estate planning.