Being asked to be an executor has always been a compliment. From April 2027, it also becomes a much bigger job, and many people who’ve agreed to do it don’t know yet.
If a parent, relative or close friend has named you in their Will, you probably pictured a fairly familiar list of tasks: register the death, apply for probate, close the bank accounts, sell the house, share out what’s left. It’s never easy, but it’s well-trodden ground.
A change to Inheritance Tax (IHT) rules is about to add something new to that list. Pensions, often one of the largest assets a person owns, are being brought into the IHT net. And the job of finding them, valuing them and settling the tax on them falls squarely on the executor’s shoulders.
What's changing
Until now, most unused pension funds have sat outside a person’s estate for IHT purposes. That was a big part of their appeal as a way to pass on wealth.
That ends for deaths on or after 6 April 2027. The rules, now confirmed in the Finance Act 2026, mean most unused pension funds and pension death benefits will count towards the value of the estate for IHT.
For executors (or “personal representatives”, to use the legal term), that means:
- You are responsible for reporting and paying the IHT on pension funds – even though you don’t control them and the money may be going to people who aren’t named in the Will.
- You’ll need to contact every pension scheme to get a value at the date of death and details of who the benefits are going to.
- There are deadlines. IHT is normally due by the end of the sixth month after death, and interest is charged after that.
- You may need to tell schemes to hold money back. Executors can ask a scheme to withhold up to 50% of the taxable benefits for up to 15 months while the tax is worked out.
Some things stay outside the new rules. Death-in-service benefits are excluded, and pensions left to a spouse or civil partner remain exempt. But the executor still has to identify every pension to know which is which.
The real headache: finding the pensions
The tax itself is only half the story. The harder part, for many executors, will be working out what pensions actually exist.
Most of us have changed jobs several times, and since auto-enrolment began in 2012, almost every job comes with its own workplace pension. Add in a personal pension or two, an old SIPP and perhaps a final salary scheme from decades ago, and it’s easy to see how someone could end up with half a dozen pots, some of which they’ve long forgotten.
The numbers bear this out. The Pensions Policy Institute estimates there are 3.3 million lost pension pots in the UK, worth around £31 billion. That’s an average of almost £9,500 a pot. If the saver themselves has lost track, imagine how hard it is for a grieving family member working through a filing cabinet.
Under the new rules, a missed pension isn’t just money that goes unclaimed. It can mean an IHT bill that’s wrong, a delayed estate, interest charges and difficult conversations with beneficiaries. Executors who get HMRC clearance can be protected if a pension turns up later, but nobody wants to be in that position.
The government’s Pensions Dashboards will eventually help savers see all their pensions in one place, but the public service isn’t expected until 2027/28. It’s also designed for the saver, not their executor.
Five ways to make life easier for your executor
If you’re not completely sure what pensions you have, you’re certainly not unusual. The good news is that a little organisation now can save your family months of searching later.
- Make a list of every pension you have. Include the provider, policy number and rough value. Don’t forget old workplace schemes and any final salary pensions.
- Track down the ones you’ve lost. The free government Pension Tracing Service can help you find contact details for old schemes.
- Consider whether consolidating makes sense. Fewer pots means fewer schemes for your executor to chase. It isn’t right for everyone. Some older pensions have valuable guarantees, so take advice before moving anything.
- Check your nominations are up to date. Make sure each scheme knows who you’d like to receive your pension. An expression of wish form takes minutes and is easily forgotten after a marriage, divorce or new grandchild.
- Tell your executor where to look. Keep your list with your Will, or let your executor know where to find it. Then review your Will and wider estate plan with the new IHT rules in mind.
Tax treatment varies according to individual circumstances and is subject to change.
Inheritance tax planning, trusts, tax planning, and estate planning are not regulated by the Financial Conduct Authority.
Approver Quilter Financial Services Limited. 27/10/2026
About the author: David Braithwaite is a highly regarded financial expert, known to many as BBC Radio Kent’s “Money Mentor,” where he shares practical advice and insights on managing money effectively. As the founder of Citrus Financial, David has built a reputation for providing tailored financial guidance to individuals and families, helping them achieve their financial goals with confidence.
