However meticulous and well-made your retirement and inheritance plans are, leaving your family out of the loop could land them with unexpected bills to pay, especially given upcoming changes that will see pensions included in inheritance tax (IHT) calculations.
Today (Monday 15 September) marks the start of Pensions Awareness week, and research shows that a worrying number of Brits are either unaware of upcoming pension reforms, or have yet to communicate their retirement and inheritance plans with their family.
Nearly half of UK adults (45%) don’t discuss their retirement plans with anyone, and that only one in three (35%) discuss it with their partner, research from the Investment Association shows.
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“We want to see pensions and retirement planning become an everyday topic of conversation, with people also able to access the professional support and guidance they need,” said Imran Rasvi, senior policy adviser, pensions and institutional market at the Investment Association.
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“People today face a more complex retirement provision landscape to navigate,” Razvi continued. “This includes considering how much they need to contribute into their pension pot over their working life, and how to use that accumulated pension wealth to provide an income into old age.
“Retirement isn’t a one-size-fits-all journey, but having those conversations with friends, family, and seeking support from pension providers and professional advisers, can help mitigate any bumps in the road.”
Schroders Personal Wealth: half of Brits are unprepared for retirement
One of the thorniest issues around pensions, that many families are in the dark about, is the upcoming reforms that mean pensions will be included in inheritance tax (IHT) calculations.
Schroders Personal Wealth’s (SPW) retirement report 2025 showed that more than half (51%) of Brits are unaware of the upcoming changes, which will take effect from 2027. The report found that, despite 29% planning to pass their pensions on to descendants, 85% of people do not fully understand the inheritance tax rules.
“Retirement planning doesn’t happen in isolation,” said Alex Gaita, financial planning director at Schroders Personal Wealth. “It’s shaped as much by shifting laws and government decisions as by personal goals.” Perhaps most alarmingly, almost half of people (43%) have no up to date financial plan in place for their retirement, and a quarter of people have no financial plan whatsoever. Six in ten have never spoken to a financial adviser about their retirement.
“With tax rules likely to evolve and fresh uncertainty around the upcoming Budget, too many are planning for the future based on assumptions, not facts,” said Gaita.
Does your family know your retirement and inheritance plan?
Research from Charles Stanley reveals a broader gap in the awareness of families around inheritance planning. Their analysis showed that 36% of gen X and 27% of millennials are unaware of their parents’ inheritance plans.
Worryingly, more than a fifth (21%) of baby boomers don’t have a will in place, the research found, leaving their loved ones in the dark over how best to manage their estate.
“What’s clear from our research is that not everyone is in the loop when it comes to inheritance planning,” said Lisa Caplan, director of CSD advice and guidance at Charles Stanley. “This leaves the door open to families finding themselves having to settle unnecessarily large or unexpected tax bills, or even jeopardising hopes to pass on wealth to their loved ones.”
Caplan also highlighted that frozen tax thresholds until 2030 will sharply increase the number of families that have to pay IHT on their loved ones’ estates, especially considering the upcoming inclusion of pensions in the calculation.
How to ensure your family are aware of your financial plans
Estate planning has to factor in the latest developments in tax policy, making the landscape more complex than it has ever been before.
Razvi recommends taking the following three steps in order to ensure that your family is fully informed about your retirement planning:
1. Discuss retirement planning regularly: It is important to make retirement planning a regular topic of conversation. Regular discussions can help ensure everyone is on the same page and aware of the plans.
2. Seek professional support and guidance: It is also important to access professional support and guidance to understand pensions and retirement planning better. This can include consulting with pension providers and professional advisers to navigate the complexities of retirement provision.
3. Understand contribution and income needs: It's crucial to consider how much needs to be contributed to the pension pot over the working life and how to use the accumulated pension wealth to provide an income into old age. This involves understanding your expected future financial requirements and making informed decisions to build future financial resilience.
Gaita, meanwhile, recommends that people remain up to date on pension changes through trusted sources, build flexibility into their financial planning in partnership with a financial adviser, and start conversations with family as early as possible.
“Money remains one of the last family taboos, but open discussion is one of the most powerful tools families have,” he says.
And on the subject of broaching taboo subjects, Caplan recommends open conversations with family members around IHT planning, too.
“Involve the next generation in developing your IHT plans. This can lead to better plans and lead to plans working as intended after your death,” she says. “Ask your family about their plans and views. You may be surprised. Try not to rush to judgement.”
Caplan adds that “it’s not just about death” and advocates an "open in the case of emergency" box containing key documents such as POAs and insurance policies, as well as a list of assets and your will.
“It’s critical that people understand the value of their estates, have plans in place for how they will pass wealth on, and, importantly, communicate this with their family,” said Caplan.
We look at how to prepare your estate for pension inheritance tax rule changes in separate article.
