From 6 April 2027, almost all pension wealth will be included in the deceased’s estate: non-crystallised defined contribution pensions, crystallized defined contribution pensions not invested in annuities and lump sum death benefits from defined benefit pensions.

In the same situation as above, adding £100,000 in unused pension benefits increases this charge to £43,600.

If a person dies with a pension worth £50,000 whose inheritance consists of only an average priced house worth £300,000, their tax bill to their heirs increases by £10,000.

This change is the most profitable for the Treasury; It is estimated that it will reach 1.5 billion pounds when behavioral changes are taken into account.

The government estimates that an additional 10,500 properties will be subject to an inheritance tax charge in the first year from 2027-28 if the tax law remains unchanged.

In addition, around 38,500 properties are likely to pay more than usual, with dues rising by £34,000 from £169,000 to £203,000.