Inheritance Tax: Pensions - Question

Part of the debate – in the House of Lords at 2:58 pm on 17 November 2025.

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Photo of Lord Livermore Lord Livermore The Financial Secretary to the Treasury 2:58, 17 November 2025

My Lords, the Government continue to incentivise pension savings for their intended purpose of funding retirement. Most unused pension funds and death benefits payable from a pension will form part of a person’s estate for inheritance tax purposes from 6 April 2027. This removes distortions resulting from changes made over the last decade, which have led to pensions being openly used and marketed as a tax planning vehicle to transfer wealth, rather than to fund retirement.