Your pension and IHT
As spring gets under way, the UK property market is looking refreshed. Ri
Chancellor Rachel Reeves announced plans to include unused pension funds and death benefits within the value of estates for IHT purposes, during the Autumn Budget 2024. Under the proposals, pension administrators will report and pay IHT directly to HMRC.
Death-in-service benefits paid out by employers have traditionally been separate from personal pensions for the purposes of calculating an IHT bill. By including unused pensions and death-in-service benefits in IHT calculations, more estates could face higher taxes.
This announcement came as a surprise, particularly to those who have worked hard to build a pension as a tax-efficient way to pass wealth on to loved ones. Any changes are likely to have the greatest impact on people with established estate plans.
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Timeline
A 12-week technical consultation on the proposed changes concluded on 22 January. Once the feedback has been reviewed, government consultation principles outline that responses should be published within 12 weeks. By the third quarter of the year, the government is expected to provide specific implementation guidance on how pensions and death benefits will be treated under the new regime. Any changes wonât take effect until 6 April 2027.
As proposals are not finalised, itâs wise to consider potential implications but await the final guidance before overhauling plans. This still gives us ample time to make changes before implementation in 2027.
A review of existing pension arrangements would be useful so we can think about how the proposed changes could affect what your beneficiaries would receive.
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Time and knowledge
Rest assured we are monitoring developments and will keep you in touch as we know more. When we have more certainty, we may suggest you consider alternative options that ensure your estate remains as tax efficient as possible and aligned with your goals. Together, weâll help you secure your familyâs future with confidence.
*The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning.
ghtmove (Rightmove, 2025)
reports the average asking price rose by 1.7% (ÂĢ5,992) to ÂĢ366,189 in January 2025, the best start to the year since 2020. This suggests both buyers and sellers are optimistic about the property market this year.Â
Why is spring popular with buyers and sellers?
Longer daylight hours and blooming gardens make properties more appealing in springtime, boosting seller prospects. Rightmove says nearly 70% of homes listed in February and March go through to completion, with February homes taking an average of just 51 days to find a buyer.
A buyerâs market
With more homes being listed, buyers have more options and better chances of securing a good deal. Sellers are pricing competitively, and mortgage rates have stabilised, with a five-year fixed rate at 4.75%, slightly lower than last yearâs 4.78%.Â
How buyers can get a head-startÂ
Acting early can help buyers beat the competition. Securing a mortgage agreement in principle before starting the search strengthens a buyerâs position when making an offer. A clear budget is essential, considering not just the deposit but also legal fees, Stamp Duty, and moving costs. First-time buyers (FTBs) should also be aware of Stamp Duty changes from 1 April affecting properties over ÂĢ300,000.
Researching local property prices and neighbourhoods helps buyers assess fair value. Transport links, schools, and shops can impact both lifestyle and long-term investment potential. With high demand expected, scheduling viewings early increases the chances of securing the right home before competition intensifies.
Talk to us about your plans
We can help buyers and sellers create a strategy to manage savings, navigate mortgage options and make informed decisions. With strong market conditions and increased choice, now looks a great time to move onto or up the property ladder.
*As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.
