Inheritance tax trap you must avoid after key Rachel Reeves pensions change

is soon to become a problem for thousands of Britons for the first time, yet nearly half of over-60s are at risk of making a costly mistake. Chancellor plans to bring into taxable estates from 2027, and a whole host of people have yet to nominate who they want to inherit their pots. You can do this through an Expression of Wish form - essentially, a note to your pension provider about who you'd like your money to go to when you die. It's not legally binding but in most cases it is followed to the letter.

The worrying part? As many as 40% of people aged over 60 haven't completed one, according to a recent survey. Clare Stinton, workplace savings expert at Hargreaves Lansdown, described this as an "oversight" that could result in a loss of savings worth "thousands of pounds". By choosing your beneficiary carefully, you can reduce a potential inheritance tax (IHT) liability for your loved ones. The most tax-efficient option is naming your spouse or civil partner, as transfers between spouses are IHT-free.

But if you're single, divorced, widowed, or wish to leave your pension to someone else, such as children, grandchildren, siblings, friends, or even a charity, you still can.

Just be aware that if your estate exceeds the £325,000 nil-rate band (or £500,000 if you qualify for the residence allowance), any amount passed to non-spouses could be subject to inheritance tax from 2027.

Either way, failing to nominate a beneficiary can create delays or result in the money going to someone you no longer want to benefit. The problem is that once a pension is set up, many people forget to revisit it.

But life changes - marriage, divorce, grandchildren, laws - and your pension plans need to keep pace. So what should you do?

Most pension providers allow you to complete an Expression of Wish form online. If not, call them and explain what you need. If you have multiple pots, you'll need to nominate a beneficiary for each one. It takes minutes, yet it could save your family from unnecessary delays or a painful IHT bill.

Government figures show 10,500 estates will face IHT for the first time after the 2027 changes, and a further 38,500 will pay even more. Don't let yours be one of them. Your pension may be one of your biggest assets, so make sure it ends up in the right hands.