Labour Urged to Extend Inheritance Tax Deadline on Unused Pensions

On 28 January 2026, House of Lords peers issued a formal warning to the Labour Party following Shadow Chancellor Rachel Reeves’ proposal to impose a six‑month deadline for paying inheritance tax on unused pension pots. The peers argued that the short window could force bereaved families to liquidate illiquid assets, jeopardising estate settlements and leaving heirs exposed to unexpected tax liabilities. Reeves’ proposal, intended to streamline tax collection, has drawn criticism for its potential to create ‘serious problems’ for estate administrators across the United Kingdom. The urgency of the debate underscores the broader policy challenge of balancing fiscal enforcement with the practical realities of estate management in a rapidly changing pension landscape.