Inheritance Tax Warning
Retirees are being urged to spend their pension savings first to avoid a potential 87% tax bill due to upcoming inheritance tax reforms.
Financial experts warn that new rules, starting from April 2027, will include unspent defined contribution pensions in inheritance tax calculations.
This could result in families losing almost 90% of inherited pension savings in the worst cases, when combined with income tax on withdrawals.
The Government expects around 10,500 more estates each year to face higher tax bills as a result.
Retirees could face a huge 87 per cent tax bill on their pension savings.
Experts advise those with larger retirement pots to reconsider their approach and use pension money before dipping into other assets.
Author's summary: Inheritance tax reforms may lead to massive bills.