3 important tax changes coming in 2027 and how to prepare

Keeping your wealth as tax-efficient as possible is one of the foundations of effective financial planning. This not only means making the most of allowances and reliefs currently available but also understanding how tax rules are changing and preparing for the potential impact on your finances.

With significant tax reform due to take effect from 6 April 2027, now is the time to act.

However, research suggests that many people are poorly informed about the upcoming changes. A survey by Standard Life reveals that 9 out of 10 UK adults are unaware of the proposed reforms to Inheritance Tax (IHT) on pensions. At the same time, FTAdviser recently reported warnings of “serious confusion” surrounding changes to the annual subscription limit for Cash ISAs.

Keep reading to learn about three important tax changes planned for April 2027 and discover practical steps you could take now to prepare.

1. Most unused pension funds will no longer be exempt from Inheritance Tax

When someone dies, their beneficiaries could face an IHT bill if the value of the deceased person’s estate (their money, property, and possessions) exceeds certain thresholds. Where IHT applies, any amount above these thresholds is normally charged at 40%.

Currently, unused pension funds and death benefits are generally exempt from IHT, making them a valuable estate planning tool for passing wealth on tax-efficiently.

However, from 6 April 2027, most unused pension wealth and death benefits will be included in your estate for IHT purposes. This could push the value of your estate over – or further over – the available thresholds, increasing the amount of IHT payable. As such, your loved ones may receive less of your wealth than you intended.

You’ll still be able to pass pension wealth to your spouse or civil partner without triggering an IHT charge. Also, some pensions are exempt from the new rules, including defined benefit pensions and death in service benefits from employer Group Life schemes.

How to prepare:

  • Speak to a financial planner – They can help you understand your estate’s IHT liability under the new rules and identify strategies for reducing it.
  • Consider spending your pension earlier – Once the IHT exemption on most unused pensions is removed, preserving this wealth to pass on will offer fewer tax benefits. Instead, you could reduce the value of your estate for IHT purposes by enjoying your pension wealth now.
  • Give lifetime gifts – Use your annual gifting allowances to pass on some of your wealth IHT-free. A financial planner can advise you on how to manage this effectively without compromising your preferred lifestyle.
  • Invest in life insurance – If you can’t avoid an IHT charge altogether, think about taking out life insurance that your family could use to pay the bill. Placing your insurance in a trust could protect any payout from IHT and ensure your family receives the money as quickly as possible.

2. The annual contribution limit for Cash ISAs is being reduced for under-65s

In the 2026/27 tax year, you can contribute up to £20,000 to a single ISA or across multiple accounts. Using your full annual allowance is a simple and effective way to save and invest tax-efficiently.

However, from 6 April 2027, you might need to rethink your ISA strategy because the Cash ISA subscription limit is set to drop to £12,000 for under-65-year-olds.

The good news is that your overall ISA allowance will remain at £20,000. As such, you could still benefit from tax-efficient savings and investments up to this amount by putting £12,000 in a Cash ISA and £8,000 in a different type of ISA, such as a Stocks and Shares ISA.

How to prepare:

  • Make the most of your 2026/27 allowance – If maximising your cash savings is a priority, be sure to contribute your full £20,000 before 6 April 2027.
  • Research alternatives to your Cash ISA – Speak to a financial planner who can help you understand how other types of ISA work. Setting up an account and familiarising yourself with it now means you’ll be prepared to make full use of your annual ISA allowance when the new cash cap comes into effect.
  • Leave funds invested in your Cash ISA – Any amount you save before 6 April 2027 is fully protected and your current balance will continue to earn interest free from Income Tax and Capital Gains Tax. If you take money out and then decide to put it back in, this will count towards your new, lower £12,000 Cash ISA limit and you’ll lose the tax-free protection on any amount over this.

Read more: ISA rules are changing: Here’s everything you need to know

3. Income Tax on savings and property is set to rise

If you earn interest on savings held outside an ISA or receive rental profits from property, you could face a higher tax bill in the 2027/28 tax year.

That’s because Income Tax rates for savings and property income will rise by two percentage points from 6 April 2027. This means:

  • The basic rate will increase from 20% to 22%
  • The higher rate will increase from 40% to 42%
  • The additional rate will increase from 45% to 47%.

How to prepare:

  • Review how the new rates could affect your tax liability – A financial planner can use estimates of your taxable savings interest and rental income to model the impact on your overall tax bill. This understanding could help you identify measures for mitigating it.
  • Maximise tax-efficient savings and investments – Consider moving taxable savings into ISAs or Premium Bonds (which offer the chance to win tax-exempt cash prizes instead of traditional interest).
  • Review your pension contributions – Increasing your payments could reduce your overall adjusted net income, keeping you in a lower Income Tax band.

Get in touch

To find out more, please email hello@bluewealth.co.uk or call us on 0117-332 0230.

Please note

The content of this newsletter is offered only for general informational and educational purposes. It is not offered as, and does not constitute, financial advice.

Blue Wealth is not responsible for the accuracy of the information contained within linked sites.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate cashflow planning or tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Blue Financial Group

    Blue Wealth is a trading name of Blue Financial Group Ltd, which is authorised and regulated by the Financial Conduct Authority. www.fca.org.uk/firms/systems-reporting/register. Blue Wealth is entered on the FCA register https://register.fca.org.uk/ under reference 1049797. The guidance and/or advice contained within this website are subject to the UK regulatory regime and are therefore targeted at consumers based in the UK.

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    Our complaints procedures are available on request. If you wish to register a complaint, please contact us in writing or e-mail to the “Complaints Manager” nathan.jones@bluewealth.co.uk 141 Whiteladies Road, Bristol, BS8 2QB. Alternatively, you can telephone 0117 3320230. If you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service (FOS) further details of the FOS can be found at www.financial-ombudsman.org.uk or by contacting them on 0800 023 4 567.

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    © 2026 Blue Financial Group.

    Blue Financial Group Ltd (“We”, “Us”) is committed to protecting and respecting your privacy. This Privacy and Cookies Policy (“Policy”) (together with and any other documents referred to therein) sets out the basis on which the personal data collected from you, or that you provide to Us will be processed by Us. Please read the following carefully to understand our views and practices regarding your personal data and how We will treat it.

    For the purpose of the General Data Protection Regulation (“GDPR”) and the Data Protection Act 2018 (collectively the “Data Protection Laws”) the Data Controller is Blue Financial Group Ltd.

    YOUR PERSONAL INFORMATION

    Information we collect from you

    We collect and process some or all of the following types of information from you in the course of providing our services and other information to you and your use of our website www.bluewealth.co.uk:

    • Information that you provide to us by any means, when you request information from us, or provide information to us with the intention of enabling us to provide you with advice and/or ongoing servicing
    • The types of information that you are required to provide to us will vary depending on the products that they are advising you about, but will usually include:
      • your name
      • postal address;
      • email address;
      • telephone number;
      • date of birth;
      • gender;
      • bank details;
      • tax identifiers;
      • other information as required by your chosen product providers or as required by our regulators; and
      • information about your financial affairs, tax affairs, assets and liabilities;and may also include special category personal data relating to:
      • your health
    • If you contact us, we may keep a record of that correspondence.
    • We may also ask you to complete surveys that We use for research purposes, although you do not have to respond to them.
    • Details of your visits to the Website including, but not limited to, traffic data, location data, weblogs and other communication data, and the resources that you access.

    The provision of your name, address and date of birth, as well as certain other personal data that We will notify you of from time to time, is required from you to enable Us to advise you and to fulfil our regulatory and legal obligations. We will inform you at the point of collecting information from you, whether you are required to provide the information to Us.

    USES MADE OF YOUR INFORMATION

    Purposes of, and lawful basis for, processing

    We use information held about you for the following purposes:

    • To provide you with our services and to carry out our obligations arising from any contracts entered into between you and Us, including:
      • To send you service, support and administrative messages, reminders, technical notices, updates, security alerts, and information requested by you.
      • To operate, protect and improve Our services, Our business, and Our clients’ experience.
      • To respond to any enquiries you submit to Us.
      • As part of Our efforts to keep Our services safe and secure.Where we have a contract with you to provide our services, and where the processing of your data is necessary to perform such contract, we rely on “performance of a contract with the data subject” as the legal basis for the processing. In all other circumstances we rely on “legitimate interest” and our legitimate interests are improvement of our services and/or prevention or detection of fraud.
    • Where you provide us with special category data, this will be used solely with your consent to research and advise on one or more products to suit your needs and to assist you with applications for and management of such products, and to provide such special category data to Best Practice and third party providers so that they can carry out the services that they provide to Us.
    • To comply with our legal obligations as an authorised representative of an FCA regulated entity, including preparing and sending reports and submissions to Best Practice and/or regulatory authorities such as the FCA. “Compliance with a legal obligation” is the lawful basis on which we rely when we are carrying out regulated activities.
    • To ensure that content on the Website is presented in the most effective manner for you and for the device(s) you use to access and view the Website. In these circumstances we rely on “legitimate interest” and the legitimate interest is the improvement of our services.
    • We also use your personal data where you have contacted Us via the Website, by e-mail or telephone or participated in any surveys. In these circumstances we rely on “legitimate interest” and the legitimate interest is responding to and contacting you regarding the enquiries you have made in relation to the services We offer.

    Marketing

    In addition to the above uses We may use your information to notify you about goods or services which may be of interest to you. If you do not want Us to use your data in this way, please either (i) tick the relevant box situated on your service charter on which We collect your data; (ii) unsubscribe from our electronic communications using the method indicated in the relevant communication; or (iii) inform Us at any time by contacting Us at the contact details set out below.

    DISCLOSURE OF YOUR INFORMATION

    We routinely disclose your personal data to third parties as follows:

    • We may pass your information to our third-party service providers, agents, subcontractors and other associated organisations for the purposes of completing tasks and providing services to you on our behalf (e.g. to host our servers).

    We may disclose your personal data to any member of our corporate group, which means our subsidiaries, our ultimate holding company and its subsidiaries, as defined in section 1159 of the UK Companies Act 2006 (where applicable).

    We may also disclose your personal data to third parties:

    • in the event that We sell or buy any business or assets, in which case We may disclose your personal data to the prospective seller or buyer of such business or assets; or
    • if We or substantially all of our assets are acquired by a third party, in which case personal data held by Us about our customers will be one of the transferred assets; or
    • if We are under a duty to disclose or share your personal data in order to comply with any legal obligation, or in order to enforce or apply our client agreement/service charter; or
    • to protect Our rights, property, or safety or that of our affiliated entities and our users and any third party We interact with the to provide the Website; or
    • in relation to selected third parties only, only to the extent that you have consented to such selected third parties notifying you about certain goods or services, which may be if interest to you.

    Other than as set out above and save insofar as is necessary in order for Us to carry out our obligations arising from any contracts entered into between you and Us or with any regulatory or other legal obligation, We will not share your data with third parties unless We have procured your express consent to do so.

    STORING YOUR PERSONAL DATA

    Security

    We take appropriate measures to ensure that any personal data are kept secure, including security measures to prevent personal data from being accidentally lost, or used or accessed in an unauthorised way. We limit access to your personal data to those who have a genuine business need to know it. Those processing your information will do so only in an authorised manner and are subject to a duty of confidentiality.

    We also have procedures in place to deal with any suspected data security breach. We will notify you and any applicable regulator of a suspected data security breach where We are legally required to do so.

    Unfortunately, the transmission of information via the internet is not completely secure. Although We will do our best to protect your personal data, We cannot guarantee the security of your data transmitted to the Website; any transmission is at your own risk. Once We have received your information, We will use strict procedures and security features to try to prevent unauthorised access.

    The Website may, from time to time, contain links to and from the websites of our partner networks, advertisers and affiliates. If you follow a link to any of these websites, please note that these websites have their own privacy policies

    and terms of use and that we do not accept any responsibility or liability for these policies and terms of use. Please check these policies before you submit any personal data to these websites.

    Keeping your personal data up to date

    If your personal details change you may update them by accessing this data through the wealth platform portal, or by contacting Us using the contact details below. If you have any questions about how We use data collected which relates to you, please contact Us by sending a request by email to admin@bluewealth.co.uk

    We will endeavour to update your personal data within 5 working days of any new or updated personal data being provided to Us, in order to ensure that the personal data We hold about you is as accurate and up to date as possible.

    How long we keep your personal data

    • We will hold personal data (e.g. name, address, date of birth and contact details) in line with our regulatory and legal obligations as set out by our regulator – currently a minimum of 5 years for investment business and indefinitely for occupational pension transfer or opt-out business.
    • If you contact Us as a prospective customer using Our e-mail address or via Our Website contact form, requesting general information about our services, We will hold that personal data you choose to provide such as your name, address, e-mail address, for 12 months from Our last point of contact.

    Where we store your personal data

    All of the information that We hold about you is stored on our secure servers within the EEA.

    The data that We collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). By submitting your personal data, you agree to this transfer, storing or processing. We will take all steps reasonably necessary to ensure that your data is held securely and in accordance with this Policy. Countries outside the EEA do not have the same data protection laws as the United Kingdom and EEA and We have therefore ensured that any of our suppliers who may transfer your personal data outside the EEA has put in place appropriate measures to protect your data, either by being a member of the US-EU Privacy Shield, or by entering into a European Commission approved contract (as permitted under Article 46(5) of the General Data Protection Regulation).

    If you would like further information, please contact Us or the Compliance Director at Best Practice (see ‘Contact’ below). We will not otherwise transfer your personal data outside of the United Kingdom or EEA or to any organisation (or subordinate bodies) governed by public international law or which is set up under any agreement between two or more countries.

    YOUR RIGHTS

    Under the General Data Protection Regulation you have a number of important rights free of charge. In summary, those include rights to:

    • access to your personal data and to certain other supplementary information that this Policy is already designed to address
    • require Us to correct any mistakes in your information which We hold
    • require the erasure of personal data concerning you in certain situations
    • receive the personal data concerning you which you have provided to Us, in a structured, commonly used and machine-readable format and have the right to transmit those data to a third party in certain situations
    • object at any time to processing of personal data concerning you for direct marketing
    • object to decisions being taken by automated means which produce legal effects concerning you or similarly significantly affect you
    • object in certain other situations to our continued processing of your personal data
    • otherwise restrict our processing of your personal data in certain circumstances
    • claim compensation for damages caused by our breach of any data protection laws.

    For further information on each of those rights, including the circumstances in which they apply, see the Guidance from the UK Information Commissioner’s Office (ICO) on individuals rights under the General Data Protection Regulation.

    If you would like to exercise any of those rights, please:

    • email, call or write to US or our Compliance Director at Blue Financial Group (see the ‘Contact’ section below for details).
    • let Us have enough information to identify you [(e.g. account number, user name, registration details)],
    • let Us have proof of your identity and address (a copy of your driving licence or passport and a recent utility or credit card bill), and
    • let Us know the information to which your request relates [including any account or reference numbers, if you have them]

    HOW TO COMPLAIN

    We hope that We or our Compliance Director can resolve any query or concern you raise about our use of your information.

    The General Data Protection Regulation also gives you right to lodge a complaint with a supervisory authority, in particular in the European Union (or European Economic Area) state where you work, normally live or where any alleged infringement of data protection laws occurred. The supervisory authority in the UK is the Information Commissioner who may be contacted at https://ico.org.uk/concerns/ or telephone: 0303 123 1113.

    CHANGES TO OUR PRIVACY POLICY

    We reserve the right to modify this Policy at any time. Any changes We may make to our Policy in the future will be notified and made available to you using the Website. Your continued use of the services and the Website shall be deemed your acceptance of the varied privacy policy.

    INFORMATION ABOUT OUR USE OF COOKIES

    We may collect information about [your mobile phone, computer or other device from which you access the Website] including where available [your IP address, operating system and browser type], for systems administration [and to report aggregate information to third party affiliates]. This is statistical data about our users’ browsing actions and patterns and does not identify any individual. We may, however, use such information in conjunction with the data We have about you in order to track your usage of our services.

    Our Website uses cookies to distinguish you from other users of our Website. This helps Us to provide you with a good experience when you browse our Website and also allows Us to improve the Website. By using our Website, you agree to our use of cookies as more specifically set out below.

    A cookie is a small file of letters and numbers that We store on your browser or the hard drive of your computer if you agree. Cookies contain information that is transferred to your computer’s hard drive.

    The cookies We use include:

    • “Analytical” cookies. They allow Us to recognise and count the number of visitors and to see how visitors move around the Website when they are using it. This helps Us to improve the way our Website works, for example, by ensuring that users are finding what they are looking for easily.
    • “Strictly necessary” cookies. These are cookies that are required for the operation of our Website. They include, for example, cookies that enable you to log into secure areas of our Website, use a shopping cart or make use of e-billing services.
    • “Functionality” cookies. These are used to recognise you when you return to our Website. This enables Us to personalise our content for you, greet you by name and remember your preferences (for example, your choice of language or region).
    • “Targeting” cookies. These cookies record your visit to our Website, the pages you have visited and the links you have followed to our affiliates’ websites. We will use this information to make our Website, offers e-mailed to you and the advertising displayed on it more relevant to your interests. We may also share this information with third parties for this purpose.

    Please note that third party affiliates may also use cookies, over which We have no control.

    You may block cookies by activating the setting on your browser that allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or parts of the Website. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our Website.

    CONTACT

    All questions, comments and requests regarding this Privacy and Cookies Policy should be addressed to Nathan Jones, admin@bluewealth.co.uk or write to Us at 141 Whiteladies Road, Bristol, BS8 2QB.

    Blue Wealth
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