Britons face 'perfect storm' inheritance tax hit as pension rule change arrives in six months

From the Newshound archive · first published 10 October 2026 · last updated 11 October 2026.

Millions of families are heading for sharply higher inheritance tax bills as frozen thresholds and soaring property values trap more estates in the 40 per cent charge. A rule change due in April 2027 — folding unused pension funds into inheritance tax calculations — will reportedly turbocharge receipts already on course to nearly double. Annual IHT receipts are expected to surge from £8.7 billion this year to £14.5 billion by 2030/31. The standard tax-free threshold has been frozen at £325,000 for years, quietly dragging in more middle-class families with every passing house price rise.

From April 2027, unused pension savings will be counted alongside property and other assets when calculating what a family owes HMRC.

Standard Life tax specialist Neil Jones warned the combination of frozen thresholds, rising asset values and the pension change is "creating the conditions for a 'perfect storm'."

The government recorded its highest-ever monthly IHT receipts in June 2026 — and specialists say the worst is still to come.