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 session explored the key reforms introduced in the Autumn Budget of 2024 and their potential impact on long-term financial planning - from pension taxation to changes in inheritance tax reliefs. With the policy landscape evolving rapidly, the discussion provided timely insights into the challenges and opportunities facing advisers and their clients.

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

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

From April 2027, unused pension funds will become subject to inheritance tax - a major departure from the current exemption. Combined with the existing income tax treatment of inherited pensions post-age 75, this could result in total tax charges of up to 67%. The changes are likely to accelerate pension withdrawals and reshape decumulation strategies, particularly for clients with defined contribution schemes who had planned to preserve their pensions into later life.

2. The £1m cap on Business Relief and Agricultural Property Relief will reduce tax efficiency for estate planning

From April 2026, 100% Business Relief (BR) and Agricultural Property Relief (APR) will be limited to the first £1m of qualifying assets. Any value above this threshold will be taxed at 20%, which is half the standard inheritance tax rate. This cap introduces new complexity for clients with larger estates, particularly those relying on BR-qualifying investments, AIM shares, or trusts structured around these reliefs. Advisers should begin reviewing clients’ exposure and succession planning structures now.

3. Constant policy shifts are undermining long-term planning and investor confidence

Baroness Altmann emphasised that regular, and often retrospective, policy changes, such as the proposed pension IHT changes, risk weakening confidence in the UK pension system. While the government aims to redirect pension capital into growth assets like infrastructure and UK private markets, the erosion of incentives may result in fewer people saving sufficiently for later life.

4. Advisers must act now to help clients adapt their retirement and estate strategies

The evolving tax environment will require advisers to revisit key assumptions about when and how clients draw down pension assets, use reliefs, and transfer wealth. The proposed changes affect not just high-net-worth individuals, but also middle earners with modestly sized pension pots who may now face new tax liabilities. Advisers will be central in helping clients understand the implications, restructure plans, and consider alternatives such as annuities, life insurance, or other estate planning tools.