We recently hosted a CPD-accredited webinar for our network of IFAs, joined by Baroness Ros Altmann, former Pensions Minister and one of the UK’s leading voices on retirement policy.

The discussion focused on how the UK’s tax and retirement landscape is evolving, with a particular focus on pensions, inheritance tax (IHT), and the growing complexity of long-term financial planning. With major reforms now announced and further changes still possible, the session provided a timely reminder that advisers may need to continue evolving their support for clients as they prepare for retirement and later life.

There was a great deal to take away from the session, and we wanted to share four of the key themes that emerged.

1. Pension and IHT reform is moving quickly and may reshape long-term planning

A central theme from the session was the pace of change. Announcements in the last two Autumn Budgets have introduced new uncertainty for long-term retirement and estate planning, particularly where strategies rely on stable tax treatment over time.

Baroness Altmann emphasised that policy shifts can have wide-ranging consequences, not only for individual behaviour, but also for confidence in the long-term pension system. Advisers may find that clients increasingly want clarity and reassurance as the rules evolve.

2. Inheritance tax changes on unused pensions could lead to effective tax rates of up to 67%

From April 2027, unused pension funds are expected to be included in an individual’s estate for inheritance tax purposes. Combined with the existing income tax treatment of inherited pensions in some scenarios, this could lead to effective tax rates of up to 67%.

If implemented as proposed, the change may alter how clients think about pension withdrawals, estate planning, and the role pensions play in intergenerational wealth transfer. It could also drive more proactive decision-making around pension use during retirement.

3. The £2.5m cap on Business Property Relief (BPR) and Agricultural Property Relief (APR) will reduce tax efficiency for estate planning

Another key point raised was the impact of the new cap on 100% relief for BPR and APR. From April 2026, 100% relief will be limited to the first £2.5m of qualifying assets (doubled for a couple), with amounts above this threshold eligible for relief at 50% (equivalent to an effective 20% inheritance tax rate). Baroness Altmann also noted that changes to tax-advantaged schemes such as VCTs and EIS could further affect planning decisions for some investors.

This adds complexity for clients who have historically relied on BPR-qualifying investments, AIM exposure, or trust structures as part of estate planning. It may also mean advisers need to review existing plans sooner than they otherwise would have done.

4. Advisers may need to act early to help clients adapt their strategies

A clear takeaway from the session was the importance of early planning. These changes could affect a wider range of clients than many expect, including those with modest pension pots who may now face new inheritance tax considerations.

Advisers will play a key role in helping clients understand the implications, review current structures, and consider alternative planning tools where appropriate. This may include reviewing pension withdrawal strategies, revisiting gifting plans, considering life insurance for IHT funding and stress-testing estate planning assumptions against potential policy outcomes.