Pension changes ahead: a useful time to review your plans
The new tax year is a useful point to review your retirement plans
A number of pension and tax changes are coming over the next few years. None of these necessarily require immediate action, but they do create a good opportunity to step back and review whether your current plans remain aligned with your longer term objectives.
1. The age you can access your pension is increasing
From April 2028, the earliest age most people can access their private pension will rise from 55 to 57.
If you were born on or after 6 April 1971, this will generally apply to you. There are some exceptions, such as protected pension ages or where access is required due to ill health.
This is worth factoring into your planning, particularly if you are working towards a specific retirement timeline.
2. The State Pension age is also rising
Between 2026 and 2028, the State Pension age will increase from 66 to 67, depending on your date of birth.
Understanding when this becomes available helps you assess how much you may need to rely on private savings in the years leading up to it.
3. Pensions and Inheritance Tax
From April 2027, unused pension funds and certain death benefits are expected to be included within a person’s estate for Inheritance Tax purposes.
This represents a meaningful shift. Pensions have historically been used as an effective way to pass wealth between generations, as they have generally sat outside of the estate.
The proposed change may influence how income is drawn in retirement, particularly for those who have been prioritising the use of ISAs and other assets first.
4. Changes to the Cash ISA allowance
From April 2027, the annual Cash ISA allowance for most individuals under age 65 will reduce from £20,000 to £12,000.
Those aged 65 and over will retain the full £20,000 allowance.
This is most relevant for individuals building or holding cash savings within a tax-efficient wrapper, particularly those considering early retirement.
5. Pension dashboards are being introduced
By October 2026, most pension schemes are expected to be connected to government-backed dashboards.
These will allow you to view all of your pensions in one place, making it easier to understand your overall position and plan with greater clarity.
6. Potential changes to salary sacrifice
From April 2029, a cap of £2,000 per year is expected on pension contributions made via salary sacrifice without incurring National Insurance contributions.
Contributions above this level will still benefit from income tax relief, although National Insurance may apply.
Salary sacrifice is expected to remain a highly efficient way to save for retirement, particularly for higher earners.
What this means in practice
Pensions remain one of the most effective structures for building retirement income and, historically, for passing on wealth.
These changes do not necessarily mean that action is required today. However, they do reinforce the importance of reviewing your position regularly, to ensure your approach remains appropriate as rules evolve.
Next steps
It may be helpful to review how your current arrangements are structured and whether they continue to support your retirement plans, or not.
A conversation at this stage can provide clarity on timing, tax efficiency, and how different elements of your planning work together.
Disclaimer
Information is based on publicly available data and government announcements at the time of writing (April 2026) and may be subject to change.
Risk statement
Aetas Wealth is a trading style of Insight Financial Associates Ltd which is authorised and regulated by the Financial Conduct Authority. Our company registration number is 05054886.
The financial information contained within this article is for guidance only and does not constitute advice. Advice should be sought before taking any action or deciding not to act.
A pension is a long-term investment and is not normally accessible until age 55, rising to 57 from April 2028 unless the plan has a protected pension age.
The value of investments, and any income from them, can fall as well as rise. This may affect the level of benefits available. Pension income may also be influenced by interest rates at the time benefits are taken.
If you would like financial advice, support and guidance, please get in touch.