The episode, in writing
For a generation, the advice was simple: spend everything else first and leave the pension until last. It sat outside your estate, it could pass on free of inheritance tax, and if you died before 75 your family could often draw it tax free.
From 6 April 2027 that changes. Most unused pension funds and death benefits will be counted as part of your estate for inheritance tax, in the same way as your home, your savings and your investments.
Why it matters more than it looks
For many families the pension is the largest single asset after the house. Adding it to the estate can take a family over the threshold for the first time, or push a larger estate further into tax. And if you die after 75, the people who inherit can still pay income tax when they draw it.
The order you spend things in has just become one of the biggest decisions in your plan.
Who it hits hardest
Couples who have done everything right: built a large pension, lived on other savings, and planned to pass the pension on. The plan was sound under the old rules. It is worth looking at again under the new ones.
What we would do
First, check who your pension is nominated to, and when you last looked. Second, work out whether drawing more now, and giving some of it away from surplus income, leaves your family better off. Third, do neither in a hurry: the rules start in April 2027, and good decisions need a full picture of your estate.
Full transcript
The timestamped, searchable transcript is published with the episode.