Martin Lewis has issued a sweping warning as anyone with a pension should check a vital piece of paperwork. In a recent episode of his BBC podcast, the financial journalist spoke at length about inheritance tax.

He had some tax experts on to help explain the particulars of how the 40 percent levy works. The show naturally touched on pensions, as Labour has announced changes so that unused pensions will become liable for the tax from April 2027.

One of the specialists joining Mr Lewis was Lucie Spencer, financial planning partner at wealth management group Evelyn Partners. She shared a tip for anyone with a pension pot to consider, which Mr Lewis said he “very much” endorsed.

She urged: “For everyone out there who has a pension, regardless if it’s a large pension or you don’t have inheritance tax liability. Make sure your nomination of beneficiaries forms are up to date.”

She explained why it’s worth checking this document is correct: “That really tells the trustees of the pensions scheme who you want to pass it to.”

People often misunderstand the rules

Mr Lewis warned people often misunderstand the rules around this. He said: “People often think that pensions are covered in their will, it’s not. For a private or work pension, it is the trustee or pension provider who decides where your money goes.

“Your nomination form or beneficiaries form or expression of wishes form is what tells them, where you want it to go. You would have done it when you were signing up.

“You’d be surprised how many people get in touch with me and are annoyed because, their partner has just died, they’re not married, and it’s gone to their partner’s ex wife, not them, because that form wasn’t updated.”

One intriguing question that came in on the wider topic of inheritance tax is at what age you should start thinking about the tax and arranging your finances accordingly. The tax applies to the total assets you pass on, above certain allowances.

Why you should plan ahead

If your estate is likely to attract an inheritance tax bill, you may want to plan several years ahead. This is because you can give away a gift of any amount tax-free, as long as you give it away seven years or more before you die.

You can also give away certain amounts each tax year, so it may be worth making notes of these gifts, and to indicate that they are within your allowances. A fan of the show asked at what age it would be a good idea to start keeping notes.

Ms Spencer said your 50s is good time to think about the tax. She said: “Maybe when you’ve received an inheritance so your wealth is more, and you start to come over those nil rate bands.”

Mr Lewis’ other guest, tax barrister Harriet Brown, suggested thinking about these things even earlier in life. She said: “Early 40s, genuinely.” She explained she is in her mid 40s herself and had a friend who died of cancer recently.

She said: “It’s around this age that these things start to happen. I would say, with an abundance of caution, early to mid-40s.”