The conventional wisdom for clients with significant assets has traditionally been to leave the pension untouched and use other assets for income. From April 2027, that approach may be flipped 180 degrees, particularly for clients aged 75 and older where beneficiaries will be liable for income tax and inheritance tax may apply in certain circumstances.

Advisers will take a holistic view of a clients’ total assets before arriving at a suitable strategy. In many cases, the spousal exemption may solve the problem, albeit temporarily. Nevertheless, advice could result in a decision to run down the pension assets. If so, what are the issues?