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Month: September 2026

Planning for retirement together makes sound financial sense. After a lifetime of saving, a pension can be a significant asset, potentially comparable to the value of the family home. Understanding what you both have, how much it could provide and what may happen if one of you dies can help you make more informed decisions.

Open up the conversation

A useful first step is to gather details of your pensions, savings and other investments. Understanding the value of each pension, how it could provide an income and what death benefits may be available can give both partners a clearer picture of their financial position.

It can also be worth considering whether pension contributions are balanced between you. For example, where one partner is a higher earner and approaching relevant pension allowances, there may be circumstances in which making additional contributions to their partner’s pension could form part of a wider financial strategy.

Look beyond retirement income

Couples should also understand what could happen to their pensions if one partner dies. The tax treatment of pension benefits can depend on several factors, including the deceased’s age. From 6 April 2027, unused pension funds and certain death benefits will be included in Inheritance Tax calculations if an estate exceeds the relevant thresholds.

This makes it particularly important to discuss when and how pensions should be accessed alongside other savings and investments. Depending on individual circumstances, deciding which assets to draw on first could have implications for retirement income, tax and plans for passing wealth to beneficiaries.

Avoid taking too much too soon

How much you withdraw from a pension can be just as important as how much you have saved. Withdrawing large amounts too quickly could result in unnecessary tax and leave less money available for later life.

Couples should consider their expected spending, other sources of income and how long their savings may need to last. It is also worth allowing for unexpected costs and the possibility that spending patterns will change throughout retirement.

Make sure you both know

It is important that each partner knows where pension information is held and who to contact if the other partner dies. Even carefully considered financial arrangements can become difficult to manage if only one person knows the key details.

Reviewing your plans together can help identify potential gaps and provide a clearer picture of the lifestyle you can afford. Professional 
advice is particularly valuable for couples approaching retirement, helping them consider their pensions, income needs, tax position and longer-term objectives.

Source data:

[1] LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in December 2024.

This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax and estate planning are not regulated by the Financial Conduct Authority, depend on the individual circumstances of each client, and may be subject to change in the future. For guidance, seek professional advice. A pension is a long-term investment not normally accessible until age 55 (57 from April 2028, unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up, which would affect the level of pension benefits available. The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent finance acts. Investments can fall as well as rise in value, and you may receive back less than you invest.

A growing retirement crisis

The findings paint a concerning picture of the UK’s retirement landscape. Around 45% of working-age adults are not contributing to a pension, despite many of them being employed. Meanwhile, millions who are saving are contributing only the minimum required under automatic enrolment, which may not be enough to ensure a comfortable retirement.

The Commission estimates that, without intervention, the number of people under-saving for retirement could rise from 15 million to 19 million over the coming decades. This situation poses a potential pensions “timebomb” that could leave future retirees struggling to maintain their standard of living.

Who is most at risk?

Women continue to face a significant pension gap, often due to career breaks, part-time work and lower lifetime earnings. The report also highlights the challenges faced by self-employed workers, many of whom do not benefit from workplace pension schemes or employer contributions.

Low- and middle-income earners are another vulnerable group. Many rely solely on minimum pension contributions and have little additional savings to support them in retirement. As life expectancy continues to rise, the risk of outliving retirement savings is becoming an increasingly important issue.

The danger of accessing pensions too early

The report also raises concerns about the use of pension savings. Since the introduction of pension freedoms, many individuals have chosen to access their pension pots at the earliest opportunity.

Research cited by the Commission indicates that a significant number of savers are withdrawing their tax-free cash and spending it on items such as cars, holidays and home improvements. While these purchases may be appealing in the short term, they can significantly reduce the income available in later retirement.

Why acting early matters

The good news is that small changes made today can have a significant impact over time. Increasing pension contributions, reviewing investment choices, and making the most of employer contributions can all help improve retirement outcomes.

The earlier people start planning for their pensions, the greater the opportunity to benefit from long-term investment growth and compound returns. Waiting until retirement is approaching can make catching up far more difficult and expensive.

Don’t leave your future to chance – time to get the guidance you need to plan with certainty?

The Pensions Commission’s findings are a timely reminder that retirement planning cannot be ignored. With millions already under-saving and future retirees facing mounting financial pressures, taking action sooner rather than later could make all the difference.

If you would like to review your pension arrangements, assess whether you are saving enough for retirement, or explore ways to improve your long-term financial security, please contact us for further information and professional guidance.

Source data:

[1] Pensions 2050: Evidence and Future Priorities (The Second Pensions Commission) 15 May 2026

THIS ARTICLE DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE. A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028, UNLESS THE PLAN HAS A PROTECTED PENSION AGE). THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO UP OR DOWN, WHICH WOULD AFFECT THE LEVEL OF PENSION BENEFITS AVAILABLE. INVESTMENTS CAN RISE OR FALL IN VALUE, AND YOU MAY RECEIVE BACK LESS THAN YOU INVEST.

Callum makes striding progress towards becoming a financial adviser

We’re delighted to share that Callum has passed his Level 4 Diploma in Regulated Financial Planning – a major milestone on his journey to becoming a financial adviser.

Callum joined Investing For Tomorrow in 2022 as a business administration apprentice through Calderdale College, and has been working hard ever since to build his career in financial planning. Having passed his Level 4 Diploma, he’s now stepped into the role of Financial Planner and is listed on the FCA’s Financial Services Register.

Callum will spend the coming months working alongside Toby and Gary to be formally signed off as a “competent adviser”, with the aim of taking on more advising responsibility himself in 2027.

Callum said: “I’m excited to take the next steps in my career towards becoming a fully qualified financial adviser. Starting out as the office apprentice four years ago, I was passionate about working closely with clients to make a genuine, positive difference and help them achieve their financial goals. Being given the opportunity to train as a financial adviser has been an amazing experience — but I know this is still just the beginning of my learning journey.”

Callum will now continue working towards Chartered Status, a process that will still take a couple more years of hard work and dedication – not to mention plenty more exams!

The Office for Budget Responsibility estimates that the government will raise £14.5 billion a year by the 2030s, suggesting that more estates are being brought into the tax net. Against this backdrop, even simple planning errors can prove costly. Many families unknowingly reduce the wealth passed on to loved ones by overlooking key exemptions, misunderstanding gifting rules, or failing to plan early enough.

Ignoring the nil-rate band allowance

One of the most common mistakes is failing to make full use of the current 2026/27 £325,000 nil-rate band, which allows an individual to pass on assets free of Inheritance Tax up to that threshold. Anything above it may be taxed at 40%.

Where property is involved, the residence nil-rate band can also apply, but only in specific circumstances. Failing to structure your estate correctly can result in unnecessary tax.

Not using the residence allowance correctly

The residence nil-rate band can increase the tax-free allowance when a main home is passed to direct descendants. However, it is often misunderstood or overlooked.

If an estate is worth more than £2 million, this allowance may be tapered or lost entirely. Without careful planning, families may miss out on significant tax relief that could otherwise reduce their overall liability.

Poorly planned lifetime gifting

Gifting assets during your lifetime can be an effective way to reduce the size of your estate, but timing and structure are crucial. Gifts made more than seven years before death are generally exempt from IHT, but those made within this period may still be taxed.

There is also the annual £3,000 gifting allowance, which many people overlook. Over time, unused allowances represent a missed opportunity to reduce future tax bills.

Overlooking regular income exemptions

Some individuals do not realise that gifts from surplus income can be exempt from Inheritance Tax, provided they form part of a regular pattern and do not affect their standard of living.

This exemption is often underused, despite being one of the most effective ways to transfer wealth gradually over time without triggering tax liabilities.

Keeping assets in inefficient structures

Another common mistake is holding wealth in the wrong type of account or structure. Assets held in taxable estates can increase the overall IHT liability, particularly when investments have grown significantly in value.

Without regular reviews, portfolios may become inefficient for estate planning, leaving beneficiaries with a reduced inheritance.

Failing to plan early enough

Perhaps the most costly mistake is leaving planning until too late. Inheritance Tax is not just a concern for the very wealthy; rising property values and frozen thresholds mean that more families are affected each year.

Early planning allows more time to use exemptions, restructure assets and reduce potential tax exposure in a controlled and effective manner.

Taking action before it’s too late

With Inheritance Tax receipts continuing to rise and more estates coming within scope each year, avoiding common planning mistakes has never been more important. Small adjustments made today could significantly affect the wealth passed on to future generations.

If you would like to understand how Inheritance Tax rules may affect your estate or to explore ways to reduce any potential liability, please contact us for further information or to arrange a tailored financial planning review.

THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE. TAX TREATMENT DEPENDS ON INDIVIDUAL CIRCUMSTANCES AND MAY CHANGE IN THE FUTURE. INHERITANCE TAX, ESTATE PLANNING AND TRUSTS ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.