- Almost three-quarters of people have not taken any steps to reduce IHT liability while only a fifth (20%) have taken action
- Only 7% of those who have taken action received professional financial advice
- Almost a quarter (23%) of people have never thought about inheritance tax
The research, co-sponsored by Canada Life as part of an AKG briefing paper1, revealed that while 40% of people say they are concerned about paying inheritance tax, the majority (70%) are doing nothing to reduce a potential bill.
A fifth of consumers (20%) have taken some level of action to mitigate a potential inheritance tax bill. Of these, 7% have taken professional financial advice, 7% have made gifts to family members, 4% have set up trusts, 3% have invested in alternative asset classes and 5% have a suitable life assurance policy in place.
However, almost a quarter (23%) of people have given no thought to inheritance tax planning, leaving some at risk of being caught by a tax net with thresholds that are set to remain frozen until April 2026.
Sean Christian, MD and Executive Director, Wealth at Canada Life:
“There is clearly a huge opportunity for further education and guidance when it comes to inheritance tax planning. Families have been through intense strain over the last 18 months, with many being faced with difficult discussions and decisions that may have previously been brushed under the carpet.
“Demand for advice will grow, largely driven by societal shift and demographic change but also financial priorities following the pandemic. But as an industry we need to be clear how we can best serve these clients today and also the clients of the future in an efficient and scalable way. Building relationships with the wider family earlier by having the conversations which span generations will clearly demonstrate both the role and value of advice.
“The industry should be seen as being on the front foot for intergenerational planning and feeling better equipped to start the conversation.”
1 AKG Briefing paper, Advancing intergenerational planning opportunities, October 2021 https://www.akg.co.uk/downloads