The UK Financial Planning Changes You Need to Know About in 2026
Let’s make a plan that helps you truly thrive—not just get by.
If you have built up significant pensions, investments, savings or a business over the years, there is a lot happening in the world of financial planning.
And some of the changes coming through are particularly relevant if you're approaching retirement, have a larger estate, own a business, or simply want to understand what your current financial arrangements could mean for the next generation.
You don't need to become an expert in tax legislation.
But it is worth knowing what has changed, what is coming, and what you may need to review.
Here are some of the key changes and developments I'm keeping an eye on in 2026/2027.
Pensions and Inheritance Tax: a big change is coming
This is probably one of the biggest changes for people with substantial pension savings.
From 6 April 2027, most unused pension funds and certain pension death benefits will be brought into the value of your estate when calculating Inheritance Tax.
This is a significant change from the current position.
The legislation was included in Finance Act 2026, and HMRC has since published further technical information about how the new rules are expected to work.
Importantly, this does not mean that everyone with a pension will suddenly pay Inheritance Tax on it.
The overall IHT position still depends on the value and structure of the estate, available allowances, exemptions and other factors.
But for someone with a substantial pension who has been deliberately leaving their pension untouched as part of their estate planning, it could change the conversation.
So what should you do?
Don't immediately assume you need to withdraw money from your pension.
That could be the wrong decision.
Instead, it may be worth looking at the bigger picture:
How much do you actually need to spend in retirement, what other assets do you have, and what do you ultimately want to happen to the money you don't need?
That is where financial planning becomes particularly useful.
The Inheritance Tax thresholds haven't simply disappeared
There has been a lot of discussion around Inheritance Tax, but the basic allowances are still important.
For 2026/27 and 2027/28, the standard nil-rate band remains £325,000.
The residence nil-rate band remains £175,000, subject to the relevant conditions, including the rules around passing a qualifying residence to direct descendants.
The residence nil-rate band also begins to taper once an estate exceeds £2 million.
Where the relevant conditions are met, a married couple or civil partners may potentially have combined allowances of up to £1 million, before considering other exemptions or reliefs.
The important point is that an estate isn't simply “worth more than £1 million = IHT”.
There are different allowances, exemptions and reliefs to consider.
And, from 2027, pensions will need to be considered as part of that wider picture too.
Business owners need to look at the new Business Relief rules
If you own a business, this is another area that deserves attention.
Changes to Business Relief (BR) and Agricultural Property Relief (APR) came into effect from 6 April 2026.
For qualifying business and agricultural property, the 100% relief is now subject to a £2.5 million combined allowance, with qualifying value above that receiving relief at 50%.
There are also specific rules for certain shares traded on markets such as AIM, where the rate of relief has changed.
There are additional rules around lifetime gifts, trusts and the transfer of unused allowances between spouses or civil partners, so this isn't something that can sensibly be reduced to a single calculation.
For business owners, the key question isn't simply:
“What's my business worth?”
It is:
“How does my business fit into my overall estate and succession plan?”
Those are two very different questions.
Pension contributions still matter — but higher earners need to understand the limits
For the 2026/27 tax year, the standard pension annual allowance remains £60,000.
However, the rules can be more complicated for higher earners and for anyone who has already accessed pension benefits flexibly.
You may also be able to use unused annual allowance from the previous three tax years, subject to the relevant rules.
For someone with a high income, this can make pension planning particularly valuable — but also more complicated.
For example, simply saying “I'll put more into my pension to reduce my tax” isn't enough.
You need to consider:
Your available annual allowance
Carry forward
Your earnings
Employer contributions
Whether you have triggered the Money Purchase Annual Allowance
Your wider retirement plans
And now, potentially, your future IHT position
It's the interaction between these things that matters.
The tax-free pension lump sum hasn't disappeared
There has been plenty of discussion about pension changes, so it's worth clearing up another common misconception.
For 2026/27, the standard Lump Sum Allowance is £268,275.
For most people, this broadly represents the maximum amount of pension benefits that can normally be taken tax-free, although individual circumstances and previous pension benefits can affect the position.
So if you're approaching retirement, don't assume the rules have changed simply because you've heard that “pension tax rules are changing”.
The detail matters.
So, what does all of this actually mean?
This is probably the most important part.
You don't need to react to every tax change.
In fact, trying to constantly change things every time the rules move can sometimes make financial planning more complicated rather than less.
Instead, I think it's worth stepping back and looking at the whole picture.
For example:
If you're approaching retirement...
You might want to understand how your pensions, investments and other assets could work together to provide the income you need — while also considering what happens to anything you don't spend.
If you're a business owner...
Your business may be one of your largest assets.
Understanding how it fits into your personal wealth, retirement plans and estate planning is increasingly important.
If you have multiple pensions...
The question isn't necessarily “Should I consolidate them?”
It's:
“Do I understand what I have, why I have it, what it costs, what benefits I'm giving up, and how it fits into my overall plan?”
If you've built significant wealth...
It may be time to stop looking at each financial decision in isolation.
Your pension isn't just a pension.
Your ISA isn't just an ISA.
Your business isn't just your business.
Your cash isn't just cash.
They're all pieces of the same financial picture.
The biggest mistake may be doing nothing
And I don't mean that you need to rush out and change anything.
Quite the opposite.
With rules changing, sometimes the most sensible first step is simply to understand where you stand.
What you have.
What you need.
What you're trying to achieve.
And what the current rules could mean for you.
Because good financial planning isn't about predicting what governments will do next.
It's about building a plan that can adapt when things change.
A final thought
If you've accumulated several pension pots, built significant investments, own a successful business or have started thinking seriously about what you want to leave behind, 2026 is a good year to make sure your financial plan still reflects your circumstances.
Not because you should be worried.
But because the rules are changing, and understanding the implications gives you more options.
And, as always, tax treatment depends on individual circumstances and tax rules can change in the future.
Want to understand how the changes could affect your plans?
At Thrive Together Financial Planning, I help clients bring the different parts of their financial lives together — particularly when pensions, investments, retirement planning, business wealth and estate planning start to become more complicated.
If you're not sure how the changes could affect you, getting the bigger picture clear is a sensible place to start.
📩 If you’d like to have a conversation, feel free to get in touch.
Clear, honest financial planning helps you feel confident about the future — and that’s what truly allows you to thrive.
Information correct at September 2026. Tax rules and allowances can change, and the information in this article is intended as general information only. Your own circumstances may be different.
👉 If you want to thrive tomorrow, the best time to start is today.
Book a free consultation today: www.thrivetogetherfp.co.uk/contact
⚠️ This blog is for informational purposes only and does not constitute financial advice. Tax rules depend on individual circumstances and are subject to change. The value of pensions and investments can fall as well as rise. You may get back less than you invested. Always seek personalised advice before taking action.
