Financial Planners are rethinking their strategies on pensions and wealth transfer as the imposition of IHT on unused pensions from April next year looms closer.

In a special Cover Feature in the latest issue of Financial Planning Today Magazine, planners say the change has spurred clients to reconsider pension planning and Potentially Exempt Transfers, as well as IHT issues.

Duncan Wilson, Chartered Financial Planner at Partners Wealth Management, part of 7IM, predicted that the April 2027 change will lead to a shift in the way that advice is given, “around structuring retirement income and balancing the issues of managing income tax day-to-day vs IHT planning vs concerns over both, through the rules regarding pension benefits and age 75.”

In the article published in the Jan/Feb 2026 issue of Financial Planning Today Magazine, Keith Churchouse, Chartered Financial Planner at Chapters Financial in Surrey, said that in light of the change some clients have been asking how to spend their pension funds, rather than keeping them for later life.

He would not rule out further, perhaps negative changes to pension rules in future Budgets, he said. 

Mr Churchouse said: “We need to be mindful that other pension options, such as annuity purchase, have in recent years become real alternatives to flexible pension benefits and this highlights that no approach to Financial Planning should be standardised.”

Daniel Jones, Financial Planning director at Financial Planner and wealth manager Atomos, said clients have already become more curious about funding pensions and retirement. 

He said: “It was well-known that unused pensions were not part of the estate for IHT reasons so now clients are curious about what other strategies they could deploy to move funds out of the estate or to cherished ones."

Jo Welman, Financial Planner at Quilter Cheviot, said IHT and estate planning will become more important as unused pensions are brought into the estate.

She said: “Ever since Pension Freedoms, pensions have been an efficient vehicle to use for intergenerational wealth transfer. The change flips this on its head and, as such, people will need to plan properly and as far in advance as possible to ensure they can meet their objectives and needs when it comes to passing on wealth to family members.”

Philip Lewis, head of Financial Planning advice at Evelyn Partners, said the change has wider implications than it first appears.

He said: “For instance, it could affect allowances such as the residence nil-rate band, which provides an additional £175,000 allowance when passing a main residence to direct descendants - provided the estate is under £2m. Large pensions could push estates over this threshold, reducing or eliminating this benefit. This is just one example of why reviewing IHT strategies is essential.”

Claire Trott, head of advice at wealth manager St James’s Place, told Financial Planning Today that the change, “has driven more conversations about gifting in lifetime to either start the seven year clock on PETs or to use the gifts out of normal expenditure exemption.”

She added that insuring against IHT liabilities has also become of more interest to more people and that, “we have to change our approach to Financial Planning in response to this.”

Read the full feature in Financial Planning Today Magazine latest issue, our first of 2026. To enjoy the UK's premium publication for professional Financial Planners, Paraplanners and Wealth Managers click this link:

FINANCIAL PLANNING TODAY MAGAZINE

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