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Labour's pension inheritance tax raid could force grieving families to take out costly loans, experts warn

Families left bereaved could face debt as a result of Labour's proposal to include pensions within the inheritance tax regime from April 2027. The Council for Licensed Conveyancers warns the changes will compel relatives to take out costly short-term loans to cover tax liabilities before probate is granted.

HMRC charges interest at 7.75% if tax goes unpaid after six months — a £100,000 bill left six months overdue would rack up nearly £4,000 in interest charges.

Jo Summers of the Society of Trust and Estate Practitioners warned that beneficiaries may face waits of up to two years before pension funds are released, creating a brutal cash-flow squeeze.

Shadow pensions minister Peter Bedford said: 'Families should not be forced into high-interest debt to pay inheritance tax or pass on their homes.'

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