Most people end up with more than one pension over the years. Changing jobs, auto enrolment and older workplace schemes all contribute, and it is not unusual for a few pensions to be sitting quietly in the background.
Until now, that has not usually caused any major issues. From 6 April 2027, however, the way pensions are dealt with on death is changing, and that is likely to place more responsibility on the people handling your estate. That is why reviewing your pensions now makes sense.
What’s Changing and Why It Matters
At present, most pension funds sit outside your estate for inheritance tax purposes. From April 2027, unused pension funds are expected to be included within the estate, with responsibility for reporting and paying any tax due falling to your executors rather than the pension provider.
If you hold several pensions with different providers, your executors may need to contact each one individually, obtain valuations and pull together all the information needed for the estate. None of this is especially complicated, but it can be time consuming and frustrating, particularly at an already emotional time. Even one unclear or forgotten pension can slow the whole process down.
Should You Be Consolidating?
In many cases, having pensions in one place can make life easier. A single, modern pension can reduce paperwork, simplify death benefit options, and make things clearer for your family.
However, consolidation is not always the right answer. Some older pensions include valuable features such as guaranteed annuity rates, protected tax free cash, or specific death benefit options. Others may have charging structures that still work well. This is why pensions should always be reviewed individually. Tidying things up for the sake of it can sometimes mean giving up benefits that are valuable.
What You Can Do Now
- Check that your beneficiary nominations are up to date.
- Make a list of all your existing pensions.
- Review each one so you understand what it offers.
- Only consider consolidation where it genuinely improves flexibility or simplicity, without giving up valuable benefits.
In summary, the changes coming in April 2027 mean pensions will play a bigger role in estate planning than they have in the past. The aim is not to overhaul everything, but simply to make sure your pensions are organised, understood, and will not create unnecessary stress for your family later on.
At Wingate Financial Planning, we help you make sense of your pensions and explain things clearly. Our aim is to remove the complexity, so you and your executors have clarity and confidence.
Contact the Author
Paul Stevens — Financial Planning Adviser
Paul has over 30 years’ experience in financial services, including more than 26 years as an Independent Financial Adviser. He focuses on clear, practical advice and long term client relationships, supporting individuals and families through every stage of their financial planning. If you would like to discuss your pensions or arrange a review, Paul would be happy to help.
