For years, pensions have been regarded as one of the most effective tools for passing wealth to future generations, offering unique tax advantages unavailable with other assets.
Traditionally, pension funds have been protected from Inheritance Tax (IHT): if you died before age 75, beneficiaries could often receive your unspent pension savings tax-free, and even after age 75, funds were taxed at the recipient’s marginal Income Tax rate rather than at punitive IHT levels. This special treatment has made pensions a crucial part of long-term estate planning for those aiming to leave a legacy.
