Grieving families could be forced into debt by Labour's pension inheritance tax raid from April 2027

Labour's plan to bring unspent pensions within the scope of inheritance tax from April 2027 could force bereaved relatives into costly short-term borrowing, lawyers and probate professionals have warned. Experts say thousands of families who arranged their finances around the old rules stand to be caught out by the change.

Families face a cruel cash-flow trap: inheritance tax must be paid within six months of death, but pension payouts can take up to two years.

HMRC charges 7.75% interest on unpaid tax after six months — on a £100,000 bill, a six-month delay would generate close to £4,000 in interest charges alone.