Royal London reports surge in life insurance sales as families rush to plan for April 2027 pension tax changes
The UK's largest life and pensions mutual has seen demand for protection policies spike as customers look to shield their families from new inheritance tax rules on unused pensions.
Royal London, Britain's biggest life and pensions mutual, has reported a significant surge in life insurance sales as families scramble to protect themselves from Labour's April 2027 pension inheritance tax change. From that date, unused pension savings and death benefits will be subject to inheritance tax for the first time.
The rush has been driven by families realizing that without planning, their pensions could be hit with a 40% tax charge on amounts above the £325,000 nil-rate band, leaving their beneficiaries significantly worse off.
Barry O'Dwyer, Royal London's chief executive, said many customers are now turning to advisers specifically to arrange life insurance as a solution. "For a lot of families, especially small-business owners with built-up pension pots, the worst-case scenario is having to sell the business to pay the inheritance tax bill," he said. "What a lot of advisers are recommending is taking out life insurance to effectively pay your tax bill."
The surge has helped Royal London report net inflows of £1.8 billion in the first half of 2026, with assets under management reaching a record £43.6 billion.
Based on reporting by The Telegraph (5 August 2026). Information only, not advice.
Information only. This is general information, not financial, tax or legal advice, and not a personal recommendation. Tax rules depend on your individual circumstances and can change. Please speak to a qualified, FCA-regulated adviser or a solicitor before acting.