Are you worried about Large Private and/or Company Pensions?
Friday 27 February, 2026
Our Financial Advisers Review Pension Strategy and Planning
The Autumn Budget 2025 introduced a series of pension-related measures that are particularly relevant for individuals with larger private pensions and generous workplace schemes.
While some changes will not take effect for several years, the direction of travel is clear: higher earners and those using pensions as a long-term tax and estate planning tool may need to reassess how their arrangements are structured.
At Lonsdale, our Pension Advisers’ discussions with customers since the Budget have focused on understanding how these changes interact with existing pension strategies and whether adjustments should be considered sooner rather than later. However, we do maintain that financial decisions should not be made based on speculated changes.
For many, this starts with reviewing decisions made under the previous pension rules, before the new reforms take effect.
Deb Nolan, Independent Financial Adviser (IFA), Leeds & Bradford said:
“For customers with larger private or company pensions, the Autumn Budget reinforces how important it is to step back and review decisions that were made under the previous rules. The proposed changes to National Insurance relief and the potential reform of Inheritance Tax treatment mean that pension planning can no longer be looked at in isolation.”
Deb continued “Taking regulated pension advice early allows people to understand their current position and consider their options calmly, rather than being forced into reactive decisions later on.”
National Insurance Relief Cap on Salary Sacrifice Contributions
One of the most significant announcements for higher earners is the proposed introduction of a cap on National Insurance relief for salary sacrifice pension contributions. From April 2029, only the first £2,000 of pension contributions made through salary sacrifice will be exempt from employee and employer National Insurance Contributions.
For individuals making substantial company pension contributions, this represents a material reduction in the overall efficiency of salary sacrifice arrangements. While income tax relief on pension contributions remains unchanged, the loss of National Insurance savings above the £2,000 threshold may alter the balance between pension funding, alternative remuneration and wider financial planning.
Lonsdale is already speaking with customers who rely heavily on salary sacrifice to understand how their employer schemes operate and whether contribution strategies should be reviewed well in advance of 2029.
Defined Benefit Pension Schemes and Surplus Payments
Members of defined benefit schemes, particularly those with large, accrued benefits, should also take note of planned reforms. New legislation will allow scheme trustees, where scheme rules permit, to make direct payments of surplus assets to members.
These surplus payments will be treated as authorised pension income and taxed at the individual’s marginal rate. While this could unlock value for some members, the outcome will depend heavily on trustee discretion, scheme funding levels and the member’s wider tax position.
For individuals with significant defined benefit entitlements, Lonsdale pension advisers are helping customers understand how potential surplus payments may fit into their broader retirement and tax planning, rather than being viewed in isolation.
Proposed Changes to Inheritance Tax Treatment of Pensions
Proposed changes to the Inheritance Tax treatment of pensions were first set out in the previous budget in spring 2024 and were referenced again in the autumn budget 2025, signalling continued government intent to reform this area.
The proposal would bring unused pension funds and pension death benefits into an individual’s estate for Inheritance Tax purposes, regardless of trustee discretion. While no final legislation date has yet been confirmed, the changes are expected to apply from 6 April 2027, subject to consultation and parliamentary approval.
If introduced, this would mark a major shift for those with large private pensions who have historically viewed pensions as an efficient vehicle for passing on wealth.
At Lonsdale, pension advisers’ conversations with customers are increasingly focused on reviewing beneficiary nominations, wills and estate planning strategies that were put in place under the previous rules, to assess whether they remain appropriate.
Why Reviewing Pension Advice Matters Now
For individuals with sizeable pensions, the cumulative impact of tax changes, scheme rules and future legislative risk makes this an important time to review existing arrangements. Decisions made years ago may no longer align with the evolving tax landscape.
Receiving regulated pension advice can be particularly valuable when reviewing the current position before changes are implemented, allowing time to plan rather than react.
Lonsdale’s pension advisers work with customers to assess how company pensions, private pensions and wider investments interact, helping to create a coherent strategy for retirement income and wealth preservation.
State Pension Uprating and the Triple Lock
Although less significant for those with substantial private provision, the Budget confirmed that the Triple Lock will remain in place for the duration of this Parliament. As a result, the State Pension will rise again in April 2026, increasing by the highest of inflation, earnings growth or 2.5%.
While this provides a baseline level of income in retirement, Lonsdale pension advisers caution that frozen income tax thresholds mean more pensioners may find themselves paying tax, particularly when combined with income from private and workplace pensions.
Practical Next Steps for Those with Larger Pensions
For individuals with significant pension wealth, the key actions following the Autumn Budget 2025 include reviewing salary sacrifice arrangements ahead of 2029, understanding how defined benefit scheme changes may apply, and reassessing estate planning strategies in light of the proposed Inheritance Tax reforms.
Importantly, many of these decisions benefit from being considered before further changes are finalised, however, financial decisions should not be made based on speculation.
Disclaimer: This article is for general information only and does not constitute personal financial advice. Pension and tax rules can change, and their impact depends on individual circumstances. For personalised advice, you should consult a regulated financial adviser authorised by the Financial Conduct Authority. The Financial Conduct Authority does not regulate estate planning or tax advice. A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The information contained within this article is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change.
Latest News Previous Article
