Grieving families already facing higher inheritance tax bills After the backdoor raid on Budget. They have six months to pay but HMRC’s charge for late payment of taxes will now rise from 7.5 per cent to 9 per cent.

Experts warn it could run into thousands of pounds for some families unable to pay the bill, especially where much of the estate is tied up in assets rather than cash.

Many in the pensions sector had been expecting changes to inheritance tax, especially after the removal of the lifetime allowance last year.

This ended the charge to access fortunes of more than £1,073 million, and in the absence of inheritance tax, pensions have become a popular method of leaving money to grandchildren.

Ms. Reeves’ decision will also affect some families who lose a person earlier than expected because it could affect the death benefit, which is usually paid when someone dies while working.

The benefit is generally exempt from inheritance tax, but some policies are part of defined benefit pension schemes – So they will now face inheritance tax.

Claire Trott, of St James’s Place, said major policies could even force a previously tax-free estate to pay death duty.

He said: “The family may have to receive much less than they thought they would receive. You may feel protected, but you encounter less than you think and you may feel vulnerable.