When do pensions become subject to inheritance tax in the UK?

From 6 April 2027. Under the announced change, unused pension pots and most death benefits will be counted as part of the deceased's estate for inheritance tax. The executor becomes responsible for identifying each pension arrangement and ensuring any IHT due is paid within six months of the death.

How much is sitting in lost or unused UK pensions?

An estimated £31.1 billion, according to the Pensions Policy Institute, across an average of nearly £10,000 per pot. Because most people hold several pensions over a working life and rarely consolidate them, grieving families often cannot locate every account.

What did Canada Life find about executors and pensions?

Almost half of over-55s — 47% — have not appointed an executor. Of those who have, only 42% have shared everything needed to locate their pensions, 30% for their investments and 26% for their life insurance policies, leaving most executors without the information they will need.

What is RSM UK asking the government to do?

RSM UK is urging the government to link the upcoming pensions dashboard to the inheritance tax system, so an executor could view all of a deceased person's unused pension pots in one place. The aim is to simplify probate and help families meet the six-month IHT payment deadline from April 2027.

How can I help my executor find my pensions before 2027?

List every pension with the provider and reference number, appoint an executor and tell them, record where all assets and documents live in one reachable place, keep it current, and make sure at least one trusted person knows the record exists. A documented, findable inventory is the whole task.

UK Pensions Enter the Inheritance Tax Net in April 2027 — and £31.1bn Is Already Hard to Find

Home / News / UK Pensions Enter the Inheritance Tax Net in April 2027 — and £31.1bn Is Already Hard to Find

From 6 April 2027, unused pension pots in the UK will be pulled into the inheritance tax net for the first time. It sounds like a technical tax change. In practice, it turns a paperwork problem most families don't know they have into a financial one — because a pension can only be taxed if the executor can find it.

A single dark glass pot rendered on an ink-navy surface, its surface frosted so the contents are hidden, a thin emerald thread of light tracing a path from it to a small clear glass pot beside it that glows warm gold from within, a faint calendar page edge in shadow behind, warm gold rim light, still and contemplative, premium minimal 3D CGI, no readable text, no people

Right now, an estimated £31.1 billion sits in unused or forgotten UK pension pots, according to the Pensions Policy Institute — an average of nearly £10,000 per pot. Most people accumulate several pensions across a working life and rarely consolidate them. When that person dies, it falls to an executor to locate every one.

The executor gap

That is where the preparation breaks down. New research from Canada Life found that almost half of over-55s — 47% — have not yet appointed an executor at all. Among those who have, most have not told that person where anything is:

Only 42% have shared all the information needed to locate their pensions.
Only 30% have shared everything needed to locate their investments.
Only 26% have shared everything needed to locate their life insurance policies.

From April 2027, an executor will not just need to find those pensions to distribute them — they will need to find them to assess whether inheritance tax is owed, and to pay it within six months of the death. Miss that window and HMRC charges interest on the unpaid balance, on pots the family may not have known existed.

What the industry is asking for

This week RSM UK publicly urged the government to connect the upcoming pensions dashboard to the inheritance tax system, so that an executor could see all of a deceased person's unused pension pots in one place rather than hunting them provider by provider. Andrew Aston, the firm's pensions audit director, put the case plainly:

"Probate is already a complex and unwieldy process, which can create additional stress for families at an upsetting time. As IHT could be due on unused pension pots from April 2027, this adds yet more complexity."

The ask is sensible, but it is not yet policy — and it would only solve the pension slice of the problem anyway. Investments, insurance policies, bank accounts, property, debts and digital assets still sit wherever they sit, known to whoever was told.

Why this matters beyond the UK

Every country runs some version of this. The names change — probate, succession, inheritance tax, estate duty — but the failure mode is identical: the person who knew where everything was is gone, and the people left behind are grieving, on a deadline, and searching. An estimated $70 billion in unclaimed property is already held by US state treasurers, much of it from exactly this kind of loss.

A tax rule change like April 2027 doesn't create the problem. It just gives it a price and a deadline.

What to do before April 2027

None of this requires a lawyer to start. It requires a list.

List every pension — current and former employers, plus any private pots. Note the provider and a policy or reference number.
Appoint an executor and tell them they've been appointed. Nearly half of over-55s haven't taken even this first step.
Write down where things are — pensions, investments, insurance, accounts, property documents and debts — in one place your executor can actually reach.
Keep it current. A list that was accurate three years ago is a rumour, not a record.
Tell one trusted person it exists. A perfect inventory nobody can find is the same as no inventory.

The WiseEnding view

This is the gap WiseEnding was built to close. Not the tax — the finding. One private, maintainable place where your assets, documents, debts and instructions live, with a Legacy Heartbeat that releases them to the people you choose only when they're needed. So the person you love is never left searching while the clock runs.

The April 2027 rule is a UK deadline. But the underlying task — making sure the people you love can find everything, quickly, on the worst week of their lives — belongs to all of us, wherever we live.