Navigating the New Rules: Pensions, Mortgages, and Data Sharing

Unknown Speaker

Hello everyone, and welcome back to the B-Compliant Podcast. I’m Vicky Pearce, joined as always by Rachel MacRae. Today, we’re diving into some pretty seismic changes in the world of pensions and inheritance tax—so, if you’ve got clients with pension pots, or you’re just trying to keep up with the latest compliance curveballs, you’re in the right place.

Rachel MacRae

Hi Vicky! I have to say, this is one of those topics that’s been brewing for a while, hasn’t it? We’ve had so many conversations with advisers about the changes with inheritance tax on pensions, especially after the budget last October.

Unknown Speaker

Absolutely, Rachel. So, to recap, from April 2027, most unused pension funds and death benefits from registered pension schemes will be counted as part of the deceased’s estate for inheritance tax purposes. That means, if you’ve got pension wealth that hasn’t been drawn down, it’s now potentially subject to the standard 40% IHT rate above the Nil Rate Bands. The government reckons this’ll impact about 10,500 new estates each year, and raise an extra £1.5 billion annually. That’s not small change.

Rachel MacRae

No, it’s not! And it’s not just the tax bill that’s changing. The responsibility for reporting and paying the IHT is shifting too. It’s now on the personal representatives or beneficiaries, not the pension scheme. So, families who might never have expected to deal with IHT on pensions are suddenly in the thick of it, and they’ve got six months to pay up or face interest charges. That’s a lot to take in, especially at a difficult time.

Unknown Speaker

Yeah, and you can see where this could catch people out. It just shows how important it is to review nominations and estate plans early, not wait until it’s too late.

Rachel MacRae

And it’s not all doom and gloom—there are still ways to plan. Annuities, for example, take the funds outside of the estate and certain types could provide an income to beneficiaries post death, so they might become more attractive for some clients. And death-in-service lump sums are now confirmed to be excluded from IHT, which is a bit of a silver lining after all the industry feedback.

Unknown Speaker

Exactly. But advisers are going to have to wear a lot of hats now—tax strategist, investigator, planner. It’s about updating fact-finds, encouraging early planning, and making sure clients understand the risks. And don’t forget, pension scheme funds can only be used to pay the IHT on pension assets, not the whole estate, so beneficiaries might need to find other resources to cover the tax. It’s a lot to juggle.

Rachel MacRae

And let’s not forget the admin side, personal representatives will need clear guidance, and there could be delays for non-spouse beneficiaries while IHT is sorted. So, if you’re listening and you haven’t reviewed your clients’ nominations or talked about these changes, now’s the time. Seriously, don’t put it off.

Unknown Speaker

Couldn’t agree more. And if you’re unsure how to support your clients through this, just get in touch. We’re always happy to help. Right, shall we move on to another area where clarity is the new compliance buzzword?

Rachel MacRae

Oh, yes! The FCA’s new Policy Statement PS25/11—this is one I’ve been waiting to talk about. So, the FCA’s basically said, “enough with the jargon and the 17-page mortgage documents.” Firms now have to make their advice and contracts clear, fair, and accessible. No more hiding behind small print or baffling terms.

Unknown Speaker

It’s about time, isn’t it? I mean, we’ve all seen those documents that feel like they need a translator. The FCA’s really pushing firms to not just tick the Consumer Duty box, but actually make sure clients understand what they’re signing up for. It’s not just about mortgages, either—this is a trend we’re seeing across all financial advice and investment sectors.

Rachel MacRae

Absolutely. And, I’ll be honest, when I bought my first house (which was a few years ago now!), I remember sitting there with this mountain of paperwork, thinking, “I work in financial services and I still don’t know what half of this means!” I was glad that we had an adviser to talk us through it all. So if I felt like that, imagine how clients with no financial background must feel. This is a real opportunity for firms to stand out by making things simple and human.

Unknown Speaker

That’s a great example, Rachel. And it’s not just about being nice—it’s about ensuring clients fully understand. The FCA expects firms to review all their disclosures, not just for mortgages, but for any product or service. If you’re still handing out those dense, jargon-filled T&Cs, now’s the time to declutter and translate. And don’t forget about third-party documents—if you’re sharing them with clients, you need to make sure they’re clear too.

Rachel MacRae

Exactly. And, as we’ve seen in previous episodes, the FCA’s not afraid to take action when firms fall short on communication. So, if you’re listening and you haven’t looked at your client documents in a while, maybe give them a fresh pair of eyes—or better yet, ask someone outside the industry to read them. If they can’t understand it, your clients probably can’t either.

Unknown Speaker

Spot on. And this is all part of that bigger shift we’ve talked about before—putting the client at the centre, making things fair and accessible, and not just ticking boxes. Right, let’s keep the momentum going and talk about another area where clarity and compliance are colliding: data sharing and financial crime.

Unknown Speaker

So, the Data Use and Access Act 2025 is now live, and whilst its not fundamentally changing the way we handle, share, and access data—especially client data, it’s reinforcing the existing rules. The legal language is, well, a bit of a slog, but the aim is to make data sharing safer, more consistent, and more client-friendly. It’s a big step towards a post-GDPR data economy.

Rachel MacRae

Yeah, and it’s not just about ticking another compliance box. Firms now have to be really clear about what they’re doing with client data, especially when it comes to third-party tech providers and platform feeds. And with the new rules on Subject Access Requests, this act confirms that you can pause the response timer if you need clarification or ID checks, which has only been guidance previously.

Unknown Speaker

So it’s also a good time to review your data policies and contracts—make sure clients know what’s happening with their data and why. And, as we’ve seen in previous episodes, data and cyber risks are only getting bigger. The Home Office is now pushing for stricter ransomware reporting and tougher penalties for firms that pay ransoms. So, if you’re handling sensitive client data, you need to be ready for more scrutiny and faster reporting if something goes wrong.

Rachel MacRae

And speaking of scrutiny, the latest National Risk Assessment (NRA for short) is out, and it’s pretty clear: the UK’s still a high-risk jurisdiction for money laundering, with new trends like sanctions evasion—especially from Russia—and more creative laundering methods. Firms need to update their financial crime frameworks, review sanctions screening, and really pay attention to source-of-wealth checks, especially for high net worth or offshore clients.

Unknown Speaker

Yeah, and it’s not just a box-ticking exercise. The FCA expects firms to show how they’re using the NRA to shape their controls. And with the OFSI’s new civil enforcement proposals, there’s even more reason to make sure your sanctions processes are watertight. If you’re dealing with international assets or DFMs, now’s the time to double-check everything.

Rachel MacRae

So, to sum up—whether it’s pensions, mortgages, or data, the message is the same: clarity, preparation, and proactive compliance. If you’re feeling overwhelmed, you’re not alone! But that’s why we’re here, right Vicky?

Unknown Speaker

Absolutely, Rachel. We’ll keep breaking down the changes as they come, so you can focus on looking after your clients. Thanks for joining us today—Rach, a pleasure as always.

Rachel MacRae

Thanks, Vicky! And thanks to everyone for listening. We’ll be back soon with more updates—so stay tuned, and goodbye for now!