It’s World Pensions Tracing Day on 25 October 2026.
This year, the date has even more significance with the sector facing such substantial changes. With amendments to IHT and death benefits set to take effect in April 2027, it’s also become even more important for legal teams to be able to identify all assets within an estate during probate. Yet, according to the Pensions Policy Institute (PPI), the total value of unclaimed and lost pension pots in the UK has reached a staggering £31.1 billion.
With pensions losing their long-standing IHT exemption, discussion has mainly centred around who will pay more and how many more estates will become liable. However, for private client professionals responsible for administering estates, firms also need to plan how they will mitigate the risk associated with the increased complexity of the forthcoming changes. Secondly, teams, many of whom are already under pressure, will need to work out how to cope with the inevitable additional workload.
In any probate case, initially work must be completed to identify all of the assets within an estate. It’s so easy for clients to lose track of pensions and our research of 2,000 consumers, dating back to 2023, found that 30% of people can’t easily locate or don’t know the whereabouts of their personal pensions. Relying on a family’s memory or on a paperwork trail in our digital era is no longer enough, especially when auto-enrolment has left thousands of people with small, forgotten pension pots from short-term jobs.
This means there is a significant operational risk of redistribution of the estate if an undiscovered pension comes to light at a later date, when so many executors and legal representatives are completely unaware of the full extent of their family member’s assets.
The fact is that lost pensions are being discovered every day. However, with the new regulations coming into place there is a further risk where old pensions are identified only after IHT has already been calculated and paid. Re-administering an estate with the added complication of additional IHT exposes executors to significant financial and legal risk. And the likelihood of pensions being discovered at a later date is very real.
To protect executors and legal firms where they know pensions exist, issuing a pension withholding notice becomes statutory under the new Finance Act 2026. A pension withholding notice is a formal instruction sent by an executor to a pension provider, telling the pension provider to lock away up to 50% of the pension money meant for a beneficiary to create a financial safety net to ensure there is enough money to pay any potential IHT bills.
However, in the face of unknown pension pots an asset search offers a solution. Estatesearch provides a Financial Profile Search, accessed via our free, secure portal, enabling legal teams to order comprehensive asset and liability searches. This offers a cost-effective and efficient way of making enquiries of more than 150 organisations, searching over 450 companies and brands, including banks, building societies, investment managers, share registrars, insurers and importantly, pension providers. This helps identify accounts, allowing legal teams to make further enquiries on behalf of clients.
Our asset searches help legal teams identify the assets within an estate as early as possible, which will, in turn, ensure the correct IHT calculations can be made.
Streamlining Administration
Often, people have multiple pension pots. This means financial information may well need to be gathered from multiple pension providers. This added complexity will likely prove challenging when it comes to completing the IHT400 form. Already time-consuming to complete, any late changes introduce the risk of manual entry errors across the form. Imagine spending days finishing an IHT400, only for a forgotten pension to pop up right at the end? A single missed digit or a figure not updated following a late asset discovery can cause inaccuracies to creep across the entire IHT400 form.
Any inaccuracies in a submitted form will inevitably lead to formal queries from HMRC, resulting in lengthy delays and only adding to the distress of grieving beneficiaries. In the worst-case scenario, a firm could face direct liability for professional negligence if errors result in financial penalties or miscalculated distributions.
For firms operating on fixed fees rather than hourly rates, the extra administrative burden to check forms means they will either need to increase prices or absorb the unbillable hours. Given that April is already a busy time for completing year-end financial affairs, firms will need a way to streamline their processes.
What’s the Alternative?
At this point, specialist technology can come into its own. By combining Estatesearch’s profile search with Exizent firms can significantly reduce the risks with an efficient, accurate solution that saves time.
Firstly, Estatesearch completes a robust search to help uncover lost pensions, active accounts and other asset types, helping to ensure the IHT liability is calculated correctly the first time. Then Exizent takes over to remove repetitive manual administration, automatically replicating data and calculations directly into the IHT400 and estate accounts, mitigating human error and ensuring total accuracy. If any late pension information is found, data is input once and automatically replicated across the form.
In this way, dedicated technology helps free up legal teams to focus on providing valuable legal support to grieving families.
Looking Ahead
Until the government provides final clarity on exactly how the new pension IHT rules will operate, there will be uncertainty. However, the firms that navigate most smoothly through April 2027 and beyond, will be the ones that start leveraging specialist tech to support them in their everyday roles today.
For further information about Estatesearch please see: https://www.estatesearch.co.uk/
For further information about Exizent please see: https://www.exizent.com/
About the author
With 20+ years of experience in the industry. Including senior roles at HSBC, Google, and LexisNexis. Philip jointly leads Exizent’s legal services software business with a focus on commercial growth and strategic partnerships.
This article was submitted by Exizent as part of an advertising agreement with Today’s Wills and Probate. The views expressed in this article are those of the advertiser and not those of Today’s Wills and Probate.
