Connecting legacy pensions with an inheritance tax strategy.

The problem

A 58-year-old couple with adult children had accumulated four legacy workplace pensions, two buy-to-let properties, and a mortgage-free main residence. They wanted to start drawing income within five years while protecting their wealth for their children.

What was identified

• Problem: Fragmented pension pots were incurring high historical charges with outdated beneficiary nominations; the estate faced an estimated inheritance tax exposure over £300,000.
• What We Identified: Pensions sat largely outside their taxable estate, but the clients were planning to draw pensions first while leaving cash savings exposed to 40% IHT.
• What Was Considered: Rebalancing retirement withdrawal order to preserve pension wealth, updating Expression of Wish forms, and exploring lifetime gifting allowances.
• What Changed: A coordinated withdrawal strategy reduced income tax; death benefit nominations were aligned with estate wills; children’s inheritance protected from unnecessary tax leakage.

What was considered

Through a coordinated Financial & Estate Review, we reviewed their tax brackets, property assets and retirement funds together, identifying where simple sequencing changes produced significant tax savings.

What changed

A single, transparent plan for retirement income that preserves maximum capital for the family while keeping pensions efficiently sheltered.