Chancellor Rachel Reeves confirmed at the Budget that pensions would come under the tax to ‘make the inheritance tax system fairer’.

This will remove the opportunity for individuals to use pensions as a vehicle for inheritance tax planning by bringing unspent pension pots and death benefits payable into the scope of inheritance tax from 6 April 2027, which will affect around 8% of estates each year.

It is also coupled with an extension of the freeze on IHT thresholds to 2030.