Shield your pension on a Wish list

INHERITANCE tax is soon to become a problem for thousands of Britons for the first time, yet nearly half of over-60s are at risk of making a costly mistake.

- by Katie Elliott

Chancellor Rachel Reeves plans to bring pensions into taxable estates from 2027, and a whole host of people have yet to nominate who they want to inherit their pots.

You can do this through an Expression of Wish form essentially, a note to your pension provider about who you'd like your money to go to when you die. It's not legally binding but in most cases it is followed to the letter.

The worrying part? As many as 40% of people aged over 60 haven't completed one, according to a recent survey. Clare Stinton, workplace savings expert at Hargreaves Lansdown, described this as an “oversight” that could result in a loss of savings worth “thousands of pounds”. By choosing your beneficiary carefully, you can reduce a potential inheritance tax (IHT) liability for your loved ones.

The most tax-efficient option is naming your spouse or civil partner, as transfers between spouses are IHT-free.