HELPLINE: 
Q: What pension reforms are expected in the UK Autumn Budget?
A: Pensions are increasingly seen as a potential revenue source for the Treasury. While fundamental reforms may not be immediate, several changes could be introduced in the short term.
This is what we know and what may be considered:
- Inheritance Tax (IHT) on pensions. From 2027, unused pension pots will become subject to IHT. Details of how this will be implemented are not yet finalised.
- 25% tax-free lump sum (PCLS). Reducing or even removing this benefit is under review.
- Tax relief on contributions. Higher-rate tax relief could be removed with a flat rate applied instead. Previous governments have explored this but not acted, so this budget could be the turning point.
- ISA changes. Contribution limits may be affected, making it worth considering front-loading contributions.
If you rely on the 25% PCLS, consider whether to act before reforms are legislated and review your estate planning and beneficiary designations. Consider taking out an assurance vie if you are relocating to France.
Note that the most significant point is the PCLS. For those planning to leave the UK soon it may be advisable to withdraw this lump sum now, and, if you are in France, consider cashing in your ISAs and putting a new estate planning strategy in action.