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Pension News
Get up to speed with the latest developments from the wider world of pensions.
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Get up to speed with the latest developments from the wider world of pensions.
The Government’s Finance Act 2026 received Royal Assent in March 2026, bringing reforms to Inheritance Tax on pensions into effect for deaths on or after 6 April 2027.
This legislation means that most ‘unused’ pension funds and death benefits can be included in estates for inheritance tax (IHT) purposes. This will include any money left in a defined contribution scheme, like the Savings Trust, or a fund that’s being used for drawdown.
It’s worth pointing out that most people won’t pay IHT on pension benefits even after the rules change. For one, unused retirement savings you leave to a spouse or civil partner will remain exempt from IHT.
However, if that’s not the case for you, you’ll want to keep an eye on developments in the run-up to April 2027.
We can’t offer advice on how you use your Savings Trust benefits, but if you think the addition of your retirement savings to your estate is likely to attract an IHT bill on your death, here are some things you can do:
If you’re in a long-term relationship, consider formalising it through marriage or by entering a civil partnership. The law doesn’t recognise common-law spouses, so if you’re planning to leave assets to your partner, be aware they may need to pay IHT on any inheritance you leave them if it’s over the threshold.
It may seem obvious, but your retirement savings have been given tax relief to help you save for your retirement. And of course, any funds that remain on your death can be passed on to your spouse or civil partner while remaining exempt from IHT.
You could exchange some or all of your retirement savings in return for a guaranteed income (known as an annuity). This will normally remain outside of the scope of IHT. You also have the option to choose an annuity that pays an income to a named beneficiary on your death, although this will cost you more.
IHT rules and regulations are complicated. If you don’t understand them or think that you’re likely to be subject to IHT on your death, it’s best to speak to a financial adviser. After all, if you think your estate is likely to attract IHT, you can probably afford to take professional advice.
Here are the things you can do right now to help your family and beneficiaries avoid additional stress after your death:
If you have three or fewer, do it now on MyAviva. If you want to nominate more than three people, you can download Aviva’s Beneficiary form (opens in a new tab). Just complete it and return it to the address shown on the form.
A will lets you decide what happens to your money, property and possessions after your death, which makes administering your estate a lot easier for your personal representative. Unlike other financial services, the will-writing market is not regulated. It’s a good idea to check if a solicitor will be reviewing your will, or if the will-writing service is regulated by the Solicitors’ Regulation Authority (SRA).
Your personal representative will have to gather this information after your death in order to administer your estate. You can make it much easier by giving them a copy of your list.
Be sure to include:
Pensions UK’s Retirement Living Standards are here to help you understand what income you might need every year in retirement. They’ve been calculated following extensive research into how today’s retirees are living their lives.
The Standards show what income you might need for a ‘minimum’, ‘moderate’ or ‘comfortable’ retirement.
Currently, only 9% of the UK’s working population is expected to reach the comfortable standard, with 23% achieving the moderate standard. However, a couple with two full State Pension entitlements will achieve the minimum standard, even without additional retirement savings.
| Retirement Living Standards for 2026 | Estimated income for a single person | Change from last year | Estimated income for a couple | Change from last year |
|---|---|---|---|---|
| Comfortable standard | £45,400 | £1,500 | £62,700 | £2,100 |
| Moderate standard | £32,700 | £1,000 | £45,400 | £1,500 |
| Minimum standard | £13,900 | £500 | £22,500 | £900 |
The figures above show the income you’ll need after tax, and they assume you won’t be making mortgage or rental payments in retirement.
Find out more on the Retirement Living Standards website (opens in a new tab), where you can check out the science behind the numbers by clicking on ‘The Detail’ heading at the top of the page. For some people, two weeks in the Mediterranean might be a deal-breaker, but others may be equally delighted to holiday somewhere more local!
When launched, Pensions Dashboards will allow you to see an overview of all your UK pension scheme memberships in one place. The Savings Trust successfully connected with the Dashboard platform in 2025, and all pension providers are required to connect by 31 October 2026 at the latest.
The Pensions Dashboards Programme expects to launch the Dashboard for public use in the 2027/28 financial year. Initially, the Dashboard will only be available through the Government’s trusted www.moneyhelper.org.uk (opens in a new tab) service, but it’s likely that other companies (such as Aviva) will launch their own versions, integrating them into the apps and websites you already use.
For the latest on Pensions Dashboards, visit www.pensionsdashboardsprogramme.org.uk (opens in a new tab)
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