Pension drawdown glossary
Under Finance Act 2026, for deaths on or after 6 April 2027, most unused pension funds and death benefits count towards the value of an estate for inheritance tax. Death benefits paid to a surviving spouse or civil partner, or to a charity, stay exempt, and death-in-service benefits from a registered pension scheme are excluded. The personal representatives are responsible for reporting and paying any inheritance tax due. This changes how some people plan to use or pass on their pension.
Source: GOV.UK: Inheritance Tax on unused pension funds and death benefits · Last reviewed 24 September 2026
See every term in the A–Z glossary. Definitions are general information for the 2026/27 tax year, not personal advice.
Important: The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and benefits depend on individual circumstances. This is not financial advice.